PS3 Slim has been announced for $299. A price cut along with a new model will definately boost sales, at least in a short term perspective. Microsoft will obviously respond.
The two old dinosaurs are going at each others’ throats. PS3 is now $299. Xbox 360 is, what, $199 to $299 with the new price cut?
And Wii is still at launch price of $250.
Remember when I said, long ago, how that the Wii would eventually be higher priced than the PS3? Crazy fanboy talk, right? Well, we are almost there. Almost. If Wii can keep selling decently at $250, it shows how these Dinosaurs are price cutting themselves to oblivion.
You don’t really see innovative and ‘expansion’ orientated software coming from companies like Sony outside of technological toys like the Eye Toy. And by that, I mean appealing outside the Core. Sony’s way to appeal outside the core is Blu-Ray movie player which has nothing to do with gaming.
Contrast that with Nintendo putting their emphasis on expanding the software to spur up the interest. Nintendo is literally in a war against disinterest and they see price cuts as a surrendering their console to a drop in value.
Sony isn’t attacking disinterest. The price cut and new model will be greeted enthusiastically, but it is because the value of the system is getting closer to meeting the price.
In three years, the PS3 has had a price reduction of 50%. That’s insane. If Sony continues this rate of price cutting, the PS3 will be priced $99 by 2011.
Here’s the pickle.
What if the price cut and new model doesn’t work? It will boost sales temporarily of course, but I am sure Sony is counting on a more longterm success. If sales don’t boost longterm, what else can Sony do? Price cut yet again?
Last generation, there was a console that got heavily price reduced in an effort to boost sales. And sales were boosted temporarily. The Gamecube, despite its big price drop, never truly recovered. And analysts wonder why Iwata is adament against price cuts.
This move by Sony will eat into Xbox 360’s sales. The PS3 and Xbox 360 are linked, where one console grows the other shrinks. Neither the PS3 or Xbox 360 have anything to offer to entice those people buying Wii systems for Wii Fit or Wii Sports. This shows how powerful the Blue Ocean Strategy is in terms of its long term strategy and its profitability.