"PS3 Must Drop Price In 2007" - Ubisoft President

Ubisoft president Yves Guillemot has warned that while his company is optimistic about the prospects for the next-gen consoles, Sony must be prepared to drop the price point of the PS3 in 2007 if it is to compete effectively with the Xbox 360.

Speaking to business news agency Bloomberg, Guillemot expressed the view that while the PS3 will see enormous demand from early adopters this year, the price point could be a major stumbling block in the following months.

Ubisoft has committed heavily to the next generation with updates to existing franchises, as well as new titles such as Assassin's Creed and Wii exclusive Red Steel, and its recently revealed forecasts for the coming years are very positive for the next-gen systems. The French firm expects 40 million consoles to be sold in the US alone in 2008.

However, Guillemot - whose family controls a major stake in Ubisoft - clearly agrees with outgoing Microsoft chairman Bill Gates, who has claimed that 2007 will be the crucial year for the next-gen console battle.

PlayStation 3 is set to launch in mid-November priced at $499 for the lower-spec model, and at $599 for the higher-spec model, which includes a larger hard drive and a HDMI video port, among other additional features.

The pricing is significantly more expensive than Microsoft's Xbox 360 - which, it has been claimed, will be less expensive than the PS3 even if it is bought alongside the external HD-DVD drive which will launch for the system later this year.

[From: Gamesindustry Biz]
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Wow interesting!

The bad press coming from companies like ubisoft must be worrying Sony's PR people.

HazukiSan said:
The bad press coming from companies like ubisoft must be worrying Sonys PR people.

Doubt it - they're probably high on the drug thinking that reputation will drive their success. Sure it'll bring in a lot of sales, but in my opinion not nearly as many as the PS2 did for Sony - unless they drop the price, and/or find a cheaper way of manufacturing the high priced components.

I dont think SONY are worried right at now coz they think they own planet earth and 100+Million people will buy the PS3 i reckon it wont sell over 70Mil probably between 40-70Mil i reckon mark my words!!

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Analyst: PS3 could be third

DFC Intelligence says Sony could "easily go from first to worst"; thinks brand strength, market position can't overcome $600 price.

In the next-gen console race, there are three main competitors: Microsoft, Nintendo, and Sony. While many would love to see someone come out with some sort of "Everybody is a winner, hooray!" scenario, the simple truth is one company is going to be declared the loser. Though the finish line is still far down the road, industry analysts are already predicting who will break the tape and who will bring up the rear.

Sony has clearly been the favorite in recent years thanks to the unparalleled success of its PlayStation and PlayStation 2, but one analyst firm believes that the company may tumble down from the top of the heap. In a memo sent out today, San Diego-based DFC Intelligence explained how Sony could go from first to worst.

Though the memo contains the disclaimer that the prediction is "only one of several possible scenarios," DFC appears to be leaning towards Microsoft and Nintendo coming out on top through the next generation.

The main reason DFC sees a slide for Sony is the $600 price tag on the high-end version of the PlayStation 3. Though Sony has touted the machine as inexpensive relative to the hardware contained within it, DFC doesn't think consumers will see it that way.

"Sony has done very little to justify why the system is worth a premium price for consumers that don't care about raw hardware performance and are not hard-core audio/visual consumers," DFC said. "Unfortunately we believe that represents over 90% of the consumers in the marketplace."

DFC recognizes that software plays a large part in buyers' decisions, and points out that the PS2 was so successful because of its diverse portfolio of games and large third-party support. The broad range of software made the PS2 "a complete entertainment system for the family priced under $300," said DFC.

"With the PlayStation 3 the company is going after the high-end power user. It is almost as if Coca-Cola not only decided to go with a new formula, but also decided to exit the low-brow soft-drink business to go into high-end wines," DFC explains. "Of course, there is a market for high-end products but it is 1) a very different consumer type and 2) not nearly as big as the blue collar mass market. Wal-Mart sells more toys than FAO Schwartz and McDonald's sells more beef than Ruth's Chris Steak House."

There doesn't seem to be much of an easy way to right the ship, either. According to DFC, Sony may have drastically underestimated the competition and will have a lot of trouble cutting the price, particularly in time for the critical 2007 holiday season.

"A $600 price point is okay for launch but it will not fly in holiday 2007. If Sony wants to drive unit volume 2007 needs to be not only the year of price cuts, but the year of drastic price cuts. There is going to be a shakeup in the video game industry and even if Sony executes perfectly there could be a new market leader in two years."

imagine that!!! best day in gaming history!!

( Edited on 04.07.2006 00:55 by Nintendo_Maniac )

i agree. they need to drop that price. it took me months to work up the corrage to spend some

The question is basically whether Sony will be able to afford to drop the price- looks as though they could be still be losing a significant amount of money on each console saold well into 2007. In the end it'll be the consumers who determin the price though (If no-one buys it at $600, Sony will have to drop the price, it's logic considering how much money they've invested into the PS3)

Though Sony has touted the machine as inexpensive relative to the hardware contained within it

"It's more expensive than my rent."

That's what some Japanese developer had to say in a survey conducted by Ge-Maga (the oldest video game mag in Japan apparently).

The Japanese developer community responded overwhelmingly that the PS3 is too expensive, with 90.29% saying it's too high.

I don't know how thorough the survey was, but it's still not pretty for Sony.

*source*

It's not good news, aside from the Wii and Nintendo are getting fairly receptive reviews (for such an odd console), but if the PS3 does indeed flop, then it will be felt across the whole industry. Jobs will be cut, studios sold off and Sony also does other things as well as consoles and videogames; so the implications could be quite nasty in the long term.

Jobs will be cut, studios sold off and Sony also does other things as well as consoles and videogames; so the implications could be quite nasty in the long term.

Those studios and jobs will just shift development, in general. I doubt a failed PS3 will bring down Sony.

Those studios and jobs will just shift development, in general. I doubt a failed PS3 will bring down Sony.

That depends on what is deemed as a 'failure'...if it's a complete flop it could have pretty large implications for the company. (huge loss of money, failure of Blu-Ray etc)

I'm sure it would fuck them up fairly badly, Its just hard to see one of the worlds largest electronics companies going under.

msenyszak said:

Jobs will be cut, studios sold off and Sony also does other things as well as consoles and videogames; so the implications could be quite nasty in the long term.

Those studios and jobs will just shift development, in general. I doubt a failed PS3 will bring down Sony.

Im preety sure that the only thing thats making SONY profit is the Playstation (2, PSP, software) brand their TV's, Mp3's, Cameras, camcorders, Dvd's.... and whatever stuff they sell isnt making a profit! So if the PS3 flops then im preety sure SONY are in deep shit!
So Sony need the PS3 to make a profit on the PS3 and they need the Playstation to survive!
And i think Sony are in debt aswell not sure how much in millions that is!!!

Sony recently revealed that it was taking out an 80 billion yen ($698 million) loan. This is the first loan taken out by the company in 10 years.

*clicky*

Sony is looking like they're in bit of a pickle. If the PS3 doesn't do pretty decent and sell a good number of games, they're going to have trouble relying solely on their other things to make money to pay that back (movies, cds, tvs, etc).

( Edited on 06.07.2006 04:36 by TAG )

The PS3 will be almost a $1000 in Australia!
I'm glad I dont buy playstation or I would be broke!

PS3 will always be bought because its become a hisehold name kinda thing. They could make it as shit as they want but people still think its the best. An example of this was my mate he said that the PS2 was more powerful than the cube. I said it wasnt and he disagreed. I then showed him the specs for each console and he continued to disagree he then went on to saying that the PS2 was still better.

PS2 fans think the world of it but other dont.

i think Sony are in deep shit!

The company expects to spend 460 billion yen more next year in manufacturing facilities.

Marzy said:
PS3 will always be bought because its become a hisehold name kinda thing. They could make it as shit as they want but people still think its the best. An example of this was my mate he said that the PS2 was more powerful than the cube. I said it wasnt and he disagreed. I then showed him the specs for each console and he continued to disagree he then went on to saying that the PS2 was still better.PS2 fans think the world of it but other dont.