Sony just announced a new PS3 model in Japan. It will sit at a relatively reasonable $342, but it has no backwards compatibility with PS2 games, effectively making the console the only next-gen console without backwards support. Even the Wii plays Gamecube games. Sony fails to amaze me.
There are many great games for the PS2, and many people own the PS2. The ability to continue playing these games on the PS3 is a huge up-sell — the inability to do so is a huge drawback. Does anybody really want a Wii, PS2, *and* a PS3 sitting in their living room? But don’t worry, if you buy this new discounted PS3, you also get a copy of Spiderman 3. Wow, that makes up for the lack of backwards incompatibility… not.
This new, gimped model won’t be released in the US. It is clearly an attempt to fight Nintendo’s Wii on price to gain more market share in Japan.
These recent price cuts, models with lacking features, upgrades on capacity, more price cuts, and vaporware announcements are really starting to highlight Sony’s inability to figure out what to do. They married themselves to a horrible product life-cycle plan and now they want out, but can’t figure out how to save face. There is no silver bullet for a product that is simply too expensive.
I admire their willingness to keep fighting, but they’re pretty much screwed:
- The backwards compatibility is a requirement not a feature, at least if they plan to continue using the "PS" trademark.
- They can’t get rid of Blu-ray since game developers are already relying on the extra capacity.
- Hard drive size isn’t adding that much to the price, and the Xbox Elite has them beat anyway.
- They tried stripping luxury features like wireless controllers and that model of the console hardly sold at all and they eventually discontinued it.
- If they have great games, it might save the console, but without lots of users, publishers won’t sign on exclusives.
- They’re already bundling games or movies, and it isn’t exactly making sales any stronger.
- And despite have solid titles like MGS4 coming up, popular games like Smash Bros or Mario Party didn’t save Nintendo and we shouldn’t expect one or two games to turn the entire console around. Great games have to be a trend, but it’s impossible now that exclusives are being bled to Microsoft.
When Sony has failed to respond to Microsoft’s price cut, it told me that they aren’t ready to do it. Why? Because lots of people trying to decide between the two consoles made up their mind once Microsoft cut their prices. At that moment, had Sony cut their prices, it would have made a compelling case to save your money and buy a PS3, but they didn’t. Sony’s PS3 production costs, therefore, are still likely too high to justify a real price cut, explaining why they are doing the smoke and mirror price cuts of either gutting core features or upgrading the hard drives and discontinuing models. As in, they want to do a price cut, but it’s too painful still.
What else can Sony do? What can we expect? For one, we should see a true price cut in the next few weeks. Sony has been gutting features and testing new price points, and based on this data, they will introduce a price cut of $50 – $100.
Of course, any kind of cut is a huge loss for Sony and its distributors since all existing inventory (which there is a ton of) instantly takes a huge loss on the margin (probably a loss). But they have no choice — if they fail to meet their holiday sales projections, it will pretty much doom the console as publishers will really start to run for the hills.