Sony: Price Doesn't Make or Break a Platform

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Sony: Price Doesn't Make or Break a Platform

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Sony says that price isn't as important to consumers as the quality of a product.

Before finally lowering the price of the PlayStation 3 to $299, Sony struggled with the widespread view that the console was too expensive to hit its stride. Despite its best efforts to show the console's value, the PS3 remained in the third sales spot behind the Xbox 360 and the Wii. With the release of Sony's next-gen handheld codenamed NGP coming in the next year or so, consumers are wondering if the company has learned its lesson, or if the NGP will face the same uncomfortable price structure as the PS3. According to Sony Computer Entertainment of America president Jack Tretton, price just isn't that big of a deal.

Tretton told Fast Company that he feels "consumers respond to value," perhaps in contrast to what was seen with the PS3, which had a lot of value but was still hard for many consumers to get into at price points beyond $399. "If you're passionate about something you find a way to go out and get it and gamers are very passionate," Tretton said.

He continued to say that technology like a gaming platform is an investment that will be used for "many years." Tretton compared the investment to iPods and cellphones, saying: "People are used to spending several hundred dollars to get a portable device."

Tretton's view is that consumers judge a product and its price by how worthy it is, not necessarily by price itself. "It's not to say that the price of the platform isn't a consideration, but I don't think price makes or kills a platform," he added. "Something that's lousy and very inexpensive is not going to be successful. Something that's pricey will ultimately find its audience if there's enough value there."

These comments hint that Sony might have a slightly higher price point in mind for the NGP when it comes out than it'll probably become successful at. Rumors are pricing the device at $250-$350 depending on the model (with 3G or without), while Sony itself claims the device will be affordable. $250 would probably be the NGP's sweet spot, putting it right alongside the Nintendo 3DS, unless the 3DS drops in price by the time the NGP is released.

The idea that price can't make or break a platform feels incorrect though, and Tretton should know first-hand by Sony's experience with the overpriced PSPgo. The digital download-only device launched at $250 and was a failure by Sony's own admission, though the company tried to spin it as a success. The PS3 is doing fine for itself now, but I would say a console's price has a lot more weight than Tretton seems to feel it does.

Source: Fast Company, via CVG

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And that's exactly why Sony kept the price so high on the PS3, right?! RIGHT?! Wait...

I somewhat concur with Sony on this one..
But to a certain degree that is, fanboys will buy whatever brand they have always been following no matter the prize..

But the average non-hardcore consumer will usually buy the cheaper one, and this is a big group of people any company cannot afford to overlook...

In short, fanboys go for brand, everyone else go for prize..

These people just shouldn't talk.

He may as well have just said "the ngp is going to be way overpriced but you people are overcharged for everything else so why should you care?"

Still, it's not the most insulting thing to come from Sony.
Not as bad as "all I want for xmas is a psp."

Yeah the price doesn't break a platform.
Sony does that all by itself

Well, a lot depends if there's a cheaper alternative. Wii is different, but XBOX360 is pretty much the same as PS3.

Jack Tretton is required to say this, even if he knows it isn't true, because it's his job.

Of course consumers are price-sensitive. They pay top dollar for Apple products not just because they are high-quality, but because they lead the market, and they have excellent marketing campaigns.

I have to disagree. I bought the 360 and Wii before the PS3 because they were not as expensive. I eventually bought a PS3 when the price was not in the stratosphere.

...he's right, it doesn't make or break but it is a major factor.

I would agree that people will buy it despite the price, but in the essence of success if you want one in every house you have to monitory your price point. This is what Nintendo did and that is also why the Wii is the most widespread user base for any current gen console (despite the lack of games that appeal to every group). I think that if Sony released the NGP at the same price as the 3ds the 3ds would still sell better based on past experience. So I will agree with them on this scenario that price is less important (to a limit nobody is paying $1000 US for this thing).

Yeah you keep telling that *looks at the wii price* yeahhh no

Lower middle class citizen- "Yes, it does."

If you look at Apple products... can't help but agree with Mr. Tretton.
Any Apple product is overpriced (IMO) and yet they sell like hot cakes.
One question remains... does Sony have the same avid followers has Apple does?

Another big difference, is that Apple products don't rely on softwares to gain longevity.
Hardware (include OS) alone can do it on it's own.
iPhone is an all around good phone, iPod plays music and music is always going to be made...
and iPad, well, I'm not sure what's the need for the iPad, but it doesn't matter.

Sony on the other hand, needs game publishers to be on board to reach success.
If hardware is too expensive and consumers don't by them in mass, then publishers won't be convinced that they can get profits out of developing for the console.

If NGP is same price as 3DS... I'm sure it'll sell a lot more.
However, it all depends on what you compare it to... 64gb iPod Touch... is 400$ and no one complains.

Out of all the options iPod Touch, NGP and 3DS... I must say that Sony's device is the one I'm the most interested in and I'm not taking anything away from the other.
This is not a comment about the quality of the various products, but one about the price versus consumer habits.

So, in other words, he's saying that the NGP is going to be super expensive and people will find a way to buy one. It's "people will get a second job to buy a PS3" all over again.

HankMan:
Yeah the price doesn't break a platform.
Sony does that all by itself

Too true.

SimGrave:
If you look at Apple products... can't help but agree with Mr. Tretton.
Any Apple product is overpriced (IMO) and yet they sell like hot cakes.
One question remains... does Sony have the same avid followers has Apple does?

As we saw with the PSP Go and the PS3's sales at launch, the answer is no. This logo does not have nearly as much power over people's wallets as this logo.

While it's true that price doesn't necessarily make or break a platform, I would think pulling a bait and switch on a feature that was advertised for said platform probably does.

Customers do respond to value. They also respond to straight price. Weird.

Wow, this is economics 101 stuff. Yes price matters. It seems almost unfathomable that Sony of all companies still doesn't get it after they priced themselves right into 3rd place in this generation of consoles.

He raises an interesting point. While of course his position as PR guy means that obviously he's going to spin things for the company, I don't think he's entirely wrong. As another posted stated, look at Apple. People happily pay twice as much or more than equivalent PCs/laptops because they trust the quality of the brand.

While the PS3 was pretty locked in as the 2nd current gen console I wanted (first being the Wii, as I'm a diehard Nintendo fan), what made it really worth it for us was that it had a lot of other capabilities.

My husband wanted a blu-ray player, and most of the ones he was looking at were around $150-$200. He was happy with the one in the PS3, so we saw $400 as a good deal. Instead of saying "Ouch, $400 is awfully pricey for a console", it was "Ok, so we're paying $150 for a blu-ray player, and $250 for a console. That's reasonable." With the added bonus of internet connectivity making things like Netflix easier to use, it felt like a good deal for us.

I know the PS3 has had issues with reliability, but we've never had any problems with ours, and it's not like XBox's Red Ring/Light of Death is a good sign of reliability either.

Considering that gaming is a luxury hobby, I'm willing to spend extra on a product that has quality behind it.

SOME people will buy something regardless of price

EVERYONE has their limits.

HankMan:
Yeah the price doesn't break a platform.
Sony does that all by itself

Did anyone else feel that heat cause I think someone just got burned! if(rofl!=9000){cout>>rofl;}

I'm not saying I feel stupid buying a PS3 just to play God of War 3, I'm just saying that I've only got 3 games for it, and two of them are little big planet and it's sequal.

Price matters, especially for a handheld console. The only reason I think the price tag for the 3DS is acceptable is because it's got 3D without the glasses. Sony's new handheld, however, I wouldn't pay of $150 for what amounts to a nicer looking PSP and will probably have the same lack of game selection.

I'm a bit of a sony lover, and I must say that, more as a gamer who can often barely afford to spend 60$ a month on games, even the PS3 is still way outta my price range. The idea that price is no object fails out to the current economic trends that cheap and functional beat out expensive and luxurious.

Suuuure.
Make that handheld cost 400 bucks and see how it goes.

HankMan:
Yeah the price doesn't break a platform.
Sony does that all by itself

Hahaha, burn!!

Sony sometimes makes their products quite expensive because, well...they're Sony. I always wait for a price cut.

Jaded Scribe:
He raises an interesting point. While of course his position as PR guy means that obviously he's going to spin things for the company, I don't think he's entirely wrong. As another posted stated, look at Apple. People happily pay twice as much or more than equivalent PCs/laptops because they trust the quality of the brand.

There's another problem for Sony: they don't have that same level of trust in the quality of their brand. At least not from some people. If there's anything I've learned from having a busted launch PS2 that Sony never fixed despite us sending it for repairs multiple times, a launch PS2 slim with a power brick recall (because it just might catch fire and burn your house down), and a launch PS3 that had the blu-ray laser in the disc drive fail and then it gained new features as a space heater and a noise maker 5 minutes after turning the damn thing on, it's that I sure as hell don't trust the quality of the Playstation brand enough to buy any more Playstation products at launch for a premium price. Now I'm more of a "Wait for it to be out for a while and see what problems others have, and hopefully by the time I feel that it's safe to invest, the price has gone down some."
(Same thing for Microsoft though, before someone starts whining about how RRoD is much worse than anything I mentioned above.)

Now Nintendo, those guys have some trust in the quality of their brand. The phrase "made of Nintendium" exists for a reason. ;)

mjc0961:

Jaded Scribe:
He raises an interesting point. While of course his position as PR guy means that obviously he's going to spin things for the company, I don't think he's entirely wrong. As another posted stated, look at Apple. People happily pay twice as much or more than equivalent PCs/laptops because they trust the quality of the brand.

There's another problem for Sony: they don't have that same level of trust in the quality of their brand. At least not from some people. If there's anything I've learned from having a busted launch PS2 that Sony never fixed despite us sending it for repairs multiple times, a launch PS2 slim with a power brick recall (because it just might catch fire and burn your house down), and a launch PS3 that had the blu-ray laser in the disc drive fail and then it gained new features as a space heater and a noise maker 5 minutes after turning the damn thing on, it's that I sure as hell don't trust the quality of the Playstation brand enough to buy any more Playstation products at launch for a premium price. Now I'm more of a "Wait for it to be out for a while and see what problems others have, and hopefully by the time I feel that it's safe to invest, the price has gone down some."
(Same thing for Microsoft though, before someone starts whining about how RRoD is much worse than anything I mentioned above.)

Now Nintendo, those guys have some trust in the quality of their brand. The phrase "made of Nintendium" exists for a reason. ;)

We didn't get our PS2 or PS3 at launch, so that may be part of it. There is almost always a curve with new hardware, especially since even the most extensive testing can't find everything. (And regardless of the industry, Murphy's Law makes it pretty easy to release a product you think works fine, then have it blow up 3 days after it comes out.)

I also absolutely agree that Nintendo is incredible. Our Wii has broken twice (2nd time was my fault for accidentally ejecting a game while it was still playing), the first time, they extended our warranty (it ran out a couple months before it broke) so we could get it fixed for free. Second time wasn't covered, but they took good care us, and it's the only time I've ever had issues with one of their products.

Didnt they say something similar before the launch of the PS3 indicating gamers would support buying PS3s at 600$.

This is a bonehead move on a guy who is supposed to be endearing the company to the public, not pissing them off by saying something that is only going to yield infuriation.

I tried to give you a 3rd chance Sony... your really dissapointing me again. I doubt I am the only one.

You know, this practically screams "It's going to be a lot of money, so get ready."

I seriously think for the NGP, price could genuinely make or break the thing. If they aim for the iPad level of expensive, then I think they will price them selves out of doing well. I can see a initial price point of about 300 dollars being a reasonable mid ground.

But good luck to them. Let's just hope GameStop's preorder price of $999 is waaaay off.

Price may not be as important as quality, but a too high price puts your product out of reach of a lot of people (especially with the economy the way it is), thus making quality irrelvent. Your machine could be the most advanced piece of hardware on the market, but if no one can afford it, then you just wasted a lot of time, money and resources on something you will not be able to easily get a return on.

Well he's right, price alone won't make or break a platform. It's about value for dollar (or whatever currency you use). If you product's price it too high for what consumer's are getting, they sure as hell ain't going to pay it, and I think Sony seriously overestimates the value of it's products.

I suppose I could agree that price by itself doesn't necessarily break a platform... but Sony has to remember that it's the customer who determines the value of a product, and it's up to the customers whether the cost/benefit ratio of a product is in their own, personal favour. Too much of what Sony was pitching in the PS3 was simply not of interest to the average console-seeking family, and a feature you won't use is not a draw.

-- Steve

Keep on dreamin', Sony.

Even though I own a PS3 and a PSP 3000 and would like to buy the NGP, I won't if it's too expensive. We waited for the price to come down a bit to get our PS3 and eventually got the MGS4 bundle for what we thought was a good price and after I accidentally trashed the screen on my PSP 1000 I did buy a brand new one at full retail, but I won't spend $400 or even $300 on the NGP. I'll wait for the price to hit $250 before I even consider it.

Unfortunately, it totally feels like, from this article, that Sony is setting us up for a four or five hundred dollar device. Sure, it might be an amazing piece of hardware, but it's not an iPad and if Sony thinks the NGP will sell well at iPad prices, they are being seriously optimistic. Handheld gaming consoles still have a stigma, even if portable and handheld gaming does not, and if Sony doesn't realize that the tablet PCs and smartphones it wants to compete against are on a different playing field than dedicated gaming portables it's going to be PSPGo all over again.

Corpse XxX:
I somewhat concur with Sony on this one..
But to a certain degree that is, fanboys will buy whatever brand they have always been following no matter the prize..

But the average non-hardcore consumer will usually buy the cheaper one, and this is a big group of people any company cannot afford to overlook...

In short, fanboys go for brand, everyone else go for prize..

Not true. Even non fanboys see something shiny and new and want it. Look at the ipad2. My brother bought one on release date and then showed me the prices of people buying it off ebay. if your willing to pay double the price for something then your an idiot. If your willing to pay $600 for a console then your not as big an idiot but....well your just kinda stupid lol.

They've obviously never paid attention to any past consoles

It probably has over $500 worth of components, so unless Sony willing to take a huge loss, the least it could be is $400. Even $250-$300 is a bit high when you can pick up a smart-phone for $100-150 and the game in the next year are going get a lot better with the new publishing platforms.

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