Okay, so the rumor is confirmed: the PS3 is dropping its price. Some even say the rumble feature is returning (my money is on there being no rumble for the PS3, ever). But it has long been anticipated that Microsoft would steal Sony’s thunder by immediately following with a price drop of its own.
However, here’s what’s interesting: you still can’t get a PS3 for cheaper than $500.
You see, even though Sony “dropped” the price, they eliminated the $499 20 GB model. Thus, the 60 GB model is the new 20 GB model. The 20 GB model is gone forever (instead of cutting its price to a more affordable $399? Idiots!). And in the end, it costs just as much money to buy a PS3, except now you get a bigger hard drive. Will this spur sales? Initially, I’m sure any perceived price cut will help. But as the dust settles and people realize the PS3 still costs exactly what it cost when it launched, I highly doubt this price cut will be any revolution. So what’s Microsoft’s next move?
Microsoft has positioned themselves for a price cut for a few months now. They even released a high end Xbox (Elite) so that they could pull the exact same stunt the PS3 did. Now that the rumored PS3 price cut is not really a price reduction, it’s very likely that Microsoft will hold off on the price cuts — for now. There is simply no point in destroying the little thunder (more like a hum) that Sony has generated.
Rather, Microsoft, like the sly fox it is, will wait until October to slash its prices. It will slash its prices right before the holidays and create a renewed buzz. If Sony caves, they will have to follow with a cut of their own, forcing them into two price cuts in a six months. Of course, if the past is any indicator, Sony won’t follow Microsoft’s Q4 price cut, and Microsoft will gain a ton of new money conscious customers who have been waiting for a machine that doesn’t cost them as much as an iPhone (wait, that really puts the iPhone’s price in perspective, but that’s for another post).
I could also mention that Nintendo is a factor, but with the Wiis still selling out, I highly doubt they have any need to cut their prices for the time being.