*UPDATED* PS3 Price Drop Confirmed for Now. Price “Increase” Rumored for Later.
July 9th, 2007As expected, Sony has officially dropped the price on the 60GB PS3 to $500. Slightly less expected is the announcement of the 80GB PS3 bundled with Motorstorm, to go on sale for $600 in August. Sony likes to talk a lot about the “value proposition” of the PS3 and it seemed that most people just didn’t buy their definition of it before at $600 for the 60GB version. I have to say, even if I were to accept the “value proposition” for the 60GB PS3 at $500 now, I still wouldn’t accept the 80GB bundle “value proposition” over the $500 60GB version. Why? Read on for more:
- The bundled game is basically worthless, certainly not worth more than $20 as a bundled game. Even if Motorstorm is a good game, it didn’t help sell consoles before and it probably isn’t really going to help sell hardware now.
- An extra 20GB is basically worthless, or at least completely insubstantial to most people, especially considering the amount of downloadable content available to people now. Sony claims that the extra space will come in handy for the new content they’re making available (movies and TV shows, like XBox Live), but I haven’t really run into an issue with space even on my 20GB 360 drive. For one thing, movies are just rentals and reside on your drive only temporarily, and secondly, you can simply delete and re-download games, demos, or other things as necessary. To assess the value, hard drives right now can be bought for well under $0.50/GB. Even if we were to give a LOT of leeway for the fact that it’s, in a sense, proprietary (which, apparently, it’s not and is actually fairly easy to upgrade as well), and say that it should be $1/GB, we’re only adding at most an extra $20 of “value” to the package. The 360 Elite added an additional 100GB and people complained that the $80 increase over the 20GB package was still too much (and it included the HDMI out as well), so I think $20 is actually a generous estimate.
- It’s
rumored(now confirmed) that the PS2/PS1 backwards compatibility chips are going to be removed for the 80GB version, as they have been for the PAL regions. To me, this would subtract quite a bit of value if it is indeed true. A new PS2, which will play both PS2 and PS1 games, costs $130 now. Certainly, this shouldn’t be the amount of value to be associated with the “true” backwards compatibility, but perhaps half that, $65, would be a more acceptable number to use. In other words, if given the choice to be a non backwards compatible system and the same exact system with backwards compatibility for $65 more, I’d probably go with the backwards compatible system (hey, I have enough stuff connecting to my TV/receiver as is).
So, given these values and simply stipulating a $500 “value” for the 60GB version, we’ve now created a system who’s value proposition equals $500+$20+$20-$65… $475? That doesn’t seem like such a good “value” to me at $600.
If, also as rumored, Sony intends to basically sell through their inventory of 60GB PS3s and leave only the 80GB bundle in place, this temporary $100 price cut will then be followed by an apparent $125 price increase. Perhaps Sony’s hope is that the “cheap” 60GB version will be in place long enough for some real system-seller games to come out, at which point only the more expensive (and more profitable) 80GB version will be left in place. If this is the case, I just can’t imagine that this price drop will sustain sales for very long, as they’ll run into the exact same “perceived value” problem they ran into before.
Posted in Jeff, PS3, Sony |
July 9th, 2007 at 3:57 pm
Very good analysis. I definitely believe that eventually, the goal is to completely remove the emotion engine from all SKUs over time as a cost saving feature. This was a disappointment with the 360 and is a disappointment with the PS3. I am a huge fan of back compat since I’m a cheap ass and play the majority of my games once they hit the bargain bin.
July 9th, 2007 at 4:07 pm
Yeah… I’m a sucker and have an order pending at Amazon now for the 60GB version. I will decide by tonight whether I want to cancel the order or not. I already own a PS2, but shelf space and receiver inputs are precious and I just don’t know if I would rather have a $400 non-BC compatible PS3 over a $500 BC compatible one. I know that I listed the value of BC at $65 above, but right now I guess I’m weighing whether an extra $35 more is a worth it. There are a handful of games I’m interested in playing on the PS3 right now, but obviously more coming around this holiday. I’m thinking that BC compatible PS3s will be gone by then, and thus, this choice to make an “investment” now.
Anyone else want to offer an opinion on the matter? It’s due to ship tomorrow from Amazon, so I can still cancel if someone offers me a persuasive argument. =)
July 9th, 2007 at 4:38 pm
Persuasive, I don’t know, but you know what I’d say, so I won’t bother saying it.
What’s BC stand for?
July 9th, 2007 at 4:40 pm
You’re making a purchasing decision on the basis of a possibility with no real evidence.
I’ll put a mark in the “sucker” category.
July 9th, 2007 at 4:41 pm
BC = Backwards compatible.
I know what you’d say, but I already have a Wii. =) The sad/expensive reality is that there are games I’d like to play (eventually) for all 3 platforms. I was fairly certain I’d be getting a PS3 at some point, I just wasn’t anticipating it being this soon.
July 9th, 2007 at 5:02 pm
Evidence of what? Good games? Or do you mean the backwards compatibility? BC is a done deal… the 80GB version doesn’t have it. Even if they continue to offer a 60GB SKU, do you really think that they won’t strip out the BC for that one as well? I consider that a done deal.
As for the games, I’ll make 2 counter-arguments.
1) There are already some well-reviewed games. Actually, the top 10 PS3 games are overall better reviewed than the top 10 Wii games right now on Gamerankings. Ok, so actually I don’t care about any of those games save maybe 1-2 , at least as far as playing them on the PS3, (and the Wii list, despite having “lower” scores, looks far better to me anyway) but I’m just making the argument that there are SOME games out there. To be more specific, I think the games I’d be potentially interested in playing right now are Resistance, Ninja Gaiden Sigma, and Super Stardust HD. Not a huge list, but on the other hand, I was sustained on the 360 with Geometry Wars and free demos until Gears of War came out.
2) There WILL be good games for it. As bad as it looks for Sony right now, I’ve never doubted that there would be good games for it. Obviously, I can’t “prove” that, but some stuff for it is already looking fantastic, including R&C and LittleBigPlanet. I can’t wait to see what the God of War and Ico/Shadow of the Colossus teams come up with.
I suppose if you’re really skeptical the question becomes, could the PS3 be such a disaster for Sony that they’re forced to cut its life short, say, sometime next year. I suppose that would make this a terrible purchase, but I guess I’m just betting (with I don’t think THAT much risk) against that happening.
July 9th, 2007 at 6:09 pm
Why would they remove BC after offering it in the first place? I can’t see that making sense unless they’re trying to cut costs, but then, why offer it to begin with?
July 9th, 2007 at 6:24 pm
FX-1:
They need to cut costs because they’re bleeding money. Why offer it in the first place? Good question… I think they just assumed that the PS3 would dominate and that they wouldn’t have to worry about short-term costs as much. The other option is that they were just looking at ways to cut costs and found that they could emulate BC decently in software. Considering the fact that they’re bleeding money AND are having trouble gaining a significant foothold in the market, I think they’re re-evaluating where they can make up some of the cost. BC was originally possible because they essentially stuck the exact PS2 chip into the PS3. Instead they’re going to a software emulator, much like the 360 does.
Is software emulation good enough? Maybe… It’s at least a much bigger list than the 360 offers with the XBox. But right now it’s looking fairly ugly for some games. For instance, God of War 2 isn’t listed at all, and God of War 1 is listed as “Should play on PLAYSTATION®3 with noticeable issues”. Umm, noticeable issues… sure. Various SKUs of FFX and FFXII work have varying compatibility (don’t ask, I have no idea what’s changed from SKU to SKU). It’s just kind of a mishmash, and if you want to be assured of full compatibility, you shouldn’t get the 80GB SKU.
July 9th, 2007 at 8:44 pm
First, let me say that I think the PS3 is a perfectly safe purchase for the long term. No question it’s gonna have solid titles and a long life. No way I see it getting “cut short”. That being said, and looking at the games you’d be currently buying it for, it would only make sense to me (an admitted cheap ass) to wait. Resistance is already old news. Who cares if you play it now at full price (or bundled into a handicapped PS3) or a year from now when you can likely get the whole mess alot cheaper along with getting a much better choice of additional software at that time should you feel so inclined. As much grief as I give Sony and the PS3, I would never call it a non-buy, but rather just a wait-n-buy-later. There’s just way too much going on with Wii60 for me to consider dropping $600-$700 for a couple more games right now. At some point, some title (or more price drops) will make the PS3 a must buy console. When that time comes, there will be lots more great games out for it and everything will be cheaper. In the mean time, rock on with your Wii60, PS2 and your bad self. The PS3 will be there when the time comes. Then again, you DO write a games blog and may consider is necessary to own for that reason, in which case, well, you’re screwed, got get your checkbook.
July 10th, 2007 at 2:53 am
1. Unless you live in a 10×10 apartment and have cash to blow, I don’t see how BC is a high priority. It never was to me, seeing as how BC usually means the customer pays more.
2. Congrats to SOny for the price drop, but WTF with 80GB? THis creates headaches for retailers, and the 60GB version will be seen as ‘inferior’….and add to that the BC will be axed, and you’re charging $100 more!? For a $60 game + 20GB!? RIPOFF!
July 10th, 2007 at 6:44 am
“Unless you live in a 10×10 apartment and have cash to blow, I don’t see how BC is a high priority.”
BC is important to me because I DON’T want to blow cash. I waited to pick up a LOT of games until they were in the $10 range, this enables me to get lots more games. I’m still working through them. Without solid BC, my investment in all those games will be wasted. So, if the BC sucks, I’ll wait on buying the console until its cheaper and I’m done with my last gen games. Thats part of the reason I jumped on the Wii right away, because all my gamecube games were still relevant, and I could unhook my gamecube and basically start the gen with a large unplayed library on the cheap. If the Wii didn’t have full BC, I might have waited on it as well. I can’t stomach buying $60 games unless they are stellar and we haven’t seen many of those just yet.
July 10th, 2007 at 9:41 am
“Then again, you DO write a games blog and may consider is necessary to own for that reason, in which case, well, you’re screwed, got get your checkbook.”
That was another motive of mine… it’ll be interesting to see if I can write it off at the end of the year considering this site, thus far, has generated virtually no revenue. We do it for the love of gaming, folks, it’s true. =)
“I can’t stomach buying $60 games unless they are stellar and we haven’t seen many of those just yet.”
Kudos to that… I’ve only straight-out bought a handful of $60 games, and most of those were because they came bundled with the 360s I bought originally. After that it was Gears of War, which I actually had a $10 coupon for. I have a few Wii games that I bought for $50 (Zelda, Elebits) and I think everything else I have from this generation I’ve traded for (Switchplanet) or was cheaper (Crackdown used for $40, RE4: Wii is only $30). I agree that it seems like there are very few games actually worth the $60 “premium” price. Even upcoming games like Halo 3, Mass Effect, and Bioshock I have pre-order specials on (Halo 3 came with $5 Live Points card, which is basically a $15 discount, Mass Effect and Bioshock for $40 at Liongames.com). I typically reserve full price purchases for only the biggest releases, with some potential exceptions around the launch of a new system.