Will they or won’t they, the old saw predictable as death and taxes. The PlayStation 3 costs $400 in a U.S. retail economy that’s still plummeting as unemployment pushes past 8.1 percent. Not an enviable position to be in, especially not when your competition (Nintendo as much as Microsoft, whatever the executive bigwigs claim) is priced so dramatically below you.
In late February an analyst with Janco Partners claimed a price drop announcement from Sony was due “in the next couple days.” Nearly a month later, no word on so much as a sales snip. What’s more, GamePro writes that Sony senior vice president of marketing Peter Dille says “there are still no immediate plans to cut the prices of the PS3 consoles.”
Janco’s Mike Hickey recently repeated his claim that Sony’s going to drop the PS3’s price “by next month.” But Sony’s still losing about $50 per PS3, according to Business Week, which pegged Sony’s costs at $448.73 per system as recently as December 2008. If Sony dropped the retail price of the PS3 by $100, they’d increase their per unit losses by nearly a quarter — from 11 to 33 percent.
The internal business cosmology of economic indices that ultimately dictate when Sony drops the PS3’s price — and by how much — are impossible to estimate in a planning capacity. At some point Sony’s manufacturing costs will drop sufficiently and the internal bean counter fiscal financial minimums will align with some executive’s “tolerable losses” formula, thus setting the cogs and wheels cranking on a price “event” announcement.
Speaking of events, GDC 2009 is next week in San Francisco (we’ll be covering it here through Game On). Could GDC be the event Janco’s hinting at?