Wednesday, April 11, 2007

20GB PS3 November 2006 - April 2007 R.I.P.

I had my tongue firmly planted in my cheek when I suggested in a previous post that Sony was undermining themselves and was secretly working to make the 360 the number one console this generation. Sony, however, is deadly serious.

In light of Microsoft's announcement of the Xbox 360 Elite, and it's $479.99 price tag, many questioned the move to essentially raise the price of the 360 to within $20 of the 20GB PS3. PS3 fanboys delighted that now a 360 model was essentially the same price as a PS3 while still lacking HD movie playback. Sony, concerned about the positive press, shitcanned the model today, making the price difference between the most expensive 360 and the least expensive PS3 a more comfortable $120.

All joking aside, this move really isn't unexpected as many retailers had stopped carrying the 20GB PS3's weeks ago and Sony's own online store also discontinued them.

The real story here is that the murder of the 20GB model is likely a precursor to a price drop, perhaps sometime in the Fall. It has been documented that Sony actually lost more money on the 20GB models than the 60GB: $307 vs. $241 per unit at the time of launch. Since then, the price of the exclusive components that the 60GB has: Wi-Fi, flash card slots, bigger hard drive, have probably come down and widened that gap even more. And keep in mind that future US models will likely cut out the Emotion Engine chip which provided hardware backwards compatibility which also saves a significant chunk of change per unit. At this point they could probably drop the 60GB to $499 and make more per unit than they were on the 20GB.

Bigger loss+no demand= today's news.

The problem for Sony is that even if they dropped the price of the 60GB PS3 by $100, that's still more expensive than the 360 is now. If Microsoft drops their price in response, as they are likely to, Sony's right back in the same boat. Only the 360 would then be even closer to a mass market price. Microsoft's sales are going to benefit a lot more from a price drop than Sony's will. People could've already gotten a PS3 for $500 if they wanted it. The slightly bigger hard drive space, Wi-fi and sleek chrome finish aren't going to suddenly start moving units when they still don't have any games.

Sony needs to get some games out NOW, if they hope to have any chance of competing this gen.

via 1up

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