Hirai: Price alone does not drive a product, PS3 has to have the breadth of software

[Zeus]

Following on from the previous post in which Kaz Hirai told Reuters that pricing is an important factor, in speaking to the Wall Street Journal he revealed what is most important to the PS3 at the moment - ensuring that there is a breadth of PS3 software widely available. Hirai went on to remark that price alone does not drive any product.



"The most important thing for me at this point in time is to ensure that we have the breadth of software," the chief executive of Sony's video game unit, Kazuo Hirai, told the Wall Street Journal at the Tokyo Game Show industry conference.

"Price alone does not drive any product."


News Source: <A href="http://gamer.blorge.com/2007/09/21/watch-out-wii-sony-outlines-astounding-ps3-rescue-plan/" target="_blank">Blorge.com</a>

[rezine39]

Finally something smart coming from Sony that was oh so obvious.

[MadMax31]

Well duh!, anyone with half a brain knows that the applications (games in this case) it's what drives a product, price it's just an appeal.

[Wesyeed]

I dunno. If the ps3 didn't cost so damn much I'd have bought one already.

[danight]

While pretty much true... its still not 100% correct!


"Price alone does not drive any product."

Ummm lets ask the folks over at nintendo if price has helped sell the wii. If the wii was $600.00 dollars like the ps3 it would sell like crap as well. While price alone might not be the only factor, it sure is a major factor. Would ps3 sell like the wii if it had a 250 price tag? Hell yeah it would even with the lack of games it has now. Wii doesn't have any good games either but price makes it easy to own.
So while sony can put some of the blame on developers, they also have to shoulder a lot of the blame since it was sony`s choice to force blu-ray on the gamers instead of adding it as a add-on.

[Carlcarl]

Zeus, why not make one post instead of 2? Am I missing something here. Just one post bellow this one you started talking about Kai's interview and you ended it in this post (that's if this is the end).

It's like the weather man showing up on the 5 o'clock news and saying it's going to rain and walk out.

Then on the 7 o'clock news, he shows up and says "tomorrow" and walks out..

then on the 10 o'clock news, he shows up again and says "at night"...

I am not attacking you, I am actually curious why at maxconsole, posters end up posting 5x about one interview.

[N1GHTRA1N]

Why not actually quote the stuff he said??

"Going aggressive only on price without being able to back it up with content doesn't make a whole lot of sense to me," he said. Hirai added that a price cut would have a "real impact" on hardware sales only if Sony also provided enough software titles to support the PS3.


He is basically saying a PS3 price drop is pointless since their isn't enough software to support a price drop. Meaning that they don't have enough software out to make up the price drop loss. If they drop the price of the PS3 $50 they need to sell enough software to make up that $50 in software sales, since the PS3 library is pretty weak right now a price drop doesn't make good business sense.

[danight]

The ps3 looses tons of money on every unit sold... That doesnt make sense. But drop the price and increase market % and 3rd party devs will provide the software. Or do what they have been doing and watch the market percent go from 16% to 15% and you will scare devs off and they will move to wii development.

So while a price drop is gonna cost sony some cash... in the long run it could pay off. If they cant sell the ps3 at the same price point of the xbox 360 then they have issues. But they need that price point.

[busboy33]

Why not actually quote the stuff he said??

"Going aggressive only on price without being able to back it up with content doesn't make a whole lot of sense to me," he said. Hirai added that a price cut would have a "real impact" on hardware sales only if Sony also provided enough software titles to support the PS3.


He is basically saying a PS3 price drop is pointless since their isn't enough software to support a price drop. Meaning that they don't have enough software out to make up the price drop loss. If they drop the price of the PS3 $50 they need to sell enough software to make up that $50 in software sales, since the PS3 library is pretty weak right now a price drop doesn't make good business sense.

So they need developers to make great games for the system, then people will buy the hardware and software, then they can drop the price.

Yes, this would work. Of course, you need developers to invest 8-20 million dollars themselves to make the game, then hope there's enough PS3 owners to buy it to recoup the losses. So the developers roll the dice with their budget, and Sony gets the benefit.

On the other side, lowering the price of the hardware will lead to more sales, at least according to Economics 101 (the Elasticity theory). More hardware sold means larger installed base, meaning developers stand a better chance to recoup losses or make a profit, leading to more games being made (selling to bigger audience = less of a gamble with developers budget). Also, dropping the price gets more Blu-Ray players into the market, helping Sony with goal #2 -- making Blu-Ray the new DVD format, from which they get much $$$ (since its their technology).


Dear Sony:
Bite the bullet. The PS3s are already costing your bottom line so much you had to sell off over a third of your insurance division. Take the losses. Drop the price. Drop the PS3 to $300 and you'll almost guaranteed win the format war, but you better do it pretty damn soon or it'll be to late -- 6 months ago it would have been "absolutely guaranteed", and in another year it'll be "HD-DVD has too large an installed base to go away now."
I know you wanted to roll to the throne of the formats and the consoles, and do it with as little fuss and pain as possible. The dream of winning both fights quickly and cleanly is over. If you're serious about Blu-Ray winning (and I think you should be, since the royalties will be steady for the next decade or so), then take the admittedly huge loss in the Playstation division. You're going to lose billions, but it will be worth it in the long run.
If you can't face the pain from cauterizing a wound, then you gotta accept the fact the wound's probably going to get infected, and down the road you're going to have to amputate a limb (if you're lucky). Blu-Ray CAN make you rich . . . if you're willing to do what's necessary.
Hugs and Kisses,
busboy33

[Scorpion3]

So...basically he's saying that the PS3's price tag is perfect and is actually a great selling point? O_o

[John Crichton]

price is a major factor. If games like assassin's creed come out, most people get it for the cheaper console.