Sony has today confirmed what everyone had been expecting: a new PS3 model for $299. But how much will this cheaper pricing structure benefit Sony and stimulate the PS3 marketplace? IndustryGamers contacted several analysts to get their take, and it seems most agree that Sony will finally see a much needed boost in PS3 sales.
"I think a price cut is key to stimulating sales, especially in this economy. It can be really hard to justify a premium price when you have two strong competitors with very solid systems. At a lower price I think there is a great deal of potential to get a lot of the PS2 consumers that were setting on the fence to jump in," DFC Intelligence's David Cole told us. " And there are a lot of those consumers out there....research shows the PS2 is still one of the most popular systems in terms of usage. We had actually built into our forecasts going two years back a drop to $300 in fall of 2009 and at the time our models showed a strong spike in sales because of the drop. Now factoring in the recession it may not be as strong but it is still a net positive for the whole industry when hardware is at mass market prices."
Colin Sebastian of Lazard Capital Markets added, "Historically price cuts stimulate demand, at least over the first couple of months, and in this case, Sony is launching a new form factor, which should also drive some incremental demand. More important over the long haul will still be the combination of hardware with software, so it's still a little premature in my view to claim that Sony will see a rebound in market share - especially if Xbox 360 price cuts are also in the cards."
Ben Schachter of Broadpoint AmTech noted that although the price cut will matter, Sony needs to market the machine and its new low price effectively to make it really matter. "Price cuts ALWAYS matter and it will make a difference. How impactful it will be will be dependent on Sony's execution (which has obviously been quite challenged this cycle). I am curious to see how it's promoted," he commented to IndustryGamers. "Will they focus on it as a Blu-ray player? Will they hope that some exclusive titles will drive sales? Will they give retailers lots of dollars to promote it. Bottom line is that price always matters and in this economy that is truer than ever, but after the initial boost, promotion will be key."
Jesse Divnich of EEDAR proclaimed "Hallelujah!" upon hearing about the price drop. Divnich went into great detail on the pricing battle and its potential effect on software sales for the remainder of the year.
You can read his full note on the next page...
