PlayStation 3 Pricing

From the e-mail bag:

Any thoughts on the PS3 pricing? I think the lack of HDMI for the “cheap” version is interesting.

Yeah, I have a few thoughts.

First, background for you folks who aren’t video game geeks: Yesterday Sony formally announced the shipping date and pricing of their upcoming PlayStation 3 Console. The PS3 will ship in November, worldwide, and will be offered in two different flavors: a $499 version and a $599 version. Both versions will ship with a Blu-Ray DVD player, Dolby 5.1 sound, ethernet and bluetooth capability and a hard drive; the $499 version’s hard drive is 20GB, while the $599 version will sport a 60GB drive.

The $599 version will also have wireless capability and an HDMI connector, which means that people who have the really high-end HD sets today will be able to play the PS3 in all its potentially eyeball-exploding glory, while the plebes who get the $499 version will have to make do with current standard A/V output. In either configuration Sony probably losing a stack of cash, since one analyst estimate suggests it costs well over $800 to put a PS3 together. Naturally, this is Sony’s problem, not yours.

Now, what do I think of the pricing? I think it’s fine, actually. $500 is steep for a gaming console, and $600 is even more so — but it’s actually pretty damn cheap for a next generation DVD player, and it’s a ridiculously dirt cheap cost for a machine that gives you both. Sony knows three things: First, the majority of video game players are adults, not (sorry, kids) whiny teens who have to beg their parents for video game money. So they have $500 or $600 to spend. Second, it knows it has to win the next-generation DVD war against HD-DVD (which Microsoft supports). Third, it knows that the consumer who is in the market for a high-end game system is probably also in the market for a high-end DVD system, and would probably be happy to get both at the same time. So: I suspect you’ll see Sony pushing the dual-value nature of the PS3 hard, to make people internalize the idea that they’re getting two high-end tech toys for the price of one.

I suspect they’ll be successful. Indeed, it’s entirely possible that a fair number of people who have already committed to the XBox 360 will also buy a PS3 for the Blu-Ray rather than go for the attachable HD-DVD drive Microsoft promises for the Xbox 360 for the holidays, on the idea that they’re getting another game system and a DVD player in the bargain. I also think that people who have neither a PS3 or an XBox 360 are likely to choose the PS3 even though the XBox 360 is (apparently) cheaper, because the PS3 has everything in the box, while the Xbox 360 makes you jump through the hoop of buying another attachment, which is another piece of clutter, another plug in the wall, and so on and so forth (if Microsoft bundles the HD-DVD player into the shipping box with the Xbox 360, there’s not likely to be a price differential between it and the low-end PS3).

I think the pricing differential here between the two PS3 versions is interesting, and different than the price differential dynamic that happened with the Xbox 360. When the 360 came out, it came in a $299 basic edition and a $399 deluxe edition; the problem was the $299 edition was genuinely substandard — in order to use the 360 as it was intended to be used, you really did need the $399 edition. This is was reflected in all the reviews, where the reviewers warned people that the $299 edition had parts buyers would miss.

In contrast, it doesn’t seem like the $499 PS3 is missing anything that gamers would need to get a good experience out of the box. Most people here in the US are still chugging along with non-high-definition television sets (or have 720p sets) and may or may not give a crap about wireless capability (which could possibly be addressed through a cheap USB dongle anyway), and the 20GB is likely to be enough for saving games and downloading various crap from the online world. For the average gamer, it’s all there, which means that practically speaking, for the typical consumer there’s likely to beno actual cost differential between the PS and the Xbox 360 with the optional HD-DVD drive.

Certainly a high number of people will feel compelled to get the $599 model, even if its capabilities outstrip the rest of their equipment, because that’s how people are (and Sony thanks them for it). But someone with the $499 model isn’t going to feel like they’ve been sentenced to the suck zone. And I think that’s going to be an important thing when it comes to sales (I also suspect after a couple of years, the $599 model will be the only model you can get — and its price will have come down to $499).

Personally speaking I’ll be buying a PS3 pretty much as soon as I can get one. One reason for this is obvious — I write for Official US PlayStation Magazine, so, you know, I have to. For work (bwa ha ha ha ha ha ha hah!). But even without the work connection I would have waited for the PS3 over the XBox 360, because of the console/Blu-Ray combination, and also because I suspect it will pull additional duty as a full-fledged computer; if I remember the rumors correctly the PS3’s hard drive will come with some flavor of Linux installed, and it will support a keyboard/mouse combo (the latter of these also key because playing first person shooters with a console controller well and truly sucks). All of which makes me want to get one just to see what it’s capable of, and piques my interest rather more than the Xbox 360 has, Halo3 notwithstanding.

Yes, I’ll be getting the expensive PS3. Sony loves me.

30 Comments on “PlayStation 3 Pricing”

  1. I was hyped on the PS3 until I saw the E3 Press Conf. That shit put me to sleep. There online system was a Xboxlive copy. The controller….Wii thinks they could have been more orignal then that.

    Blu ray…I’m a gamer 1st. I could careless about watching movies on my GAMEING CONSOLE. They should have to versions, one that is a game system only and another that is the Iwant2beeverythingsneekintoyourlivingroon system.

  2. They can’t. The games for PS3 are going to be on Blu-Ray discs.

    Personally speaking, I like that Sony is doing the 2-for-1 thing. One less piece of electronics for me to buy.

  3. The problem I have is with the European pricing. 499 Euros for the cheaper console equates to $636. More than the expensive one will cost over in the US.

  4. I’ll admit that the pricing is fine for a video game/Blue-ray DVD combo, but I’m still not sure that I want a Blue-ray player. I have a boring, old standard tv, and a big collection of DVDs. I haven’t seen or read anything yet that makes me want to switch to another format.

    I am, however, looking forward to Nintendo’s new system. Playstation and Xbox and just new versions of the same old thing. Shinier graphics, same games. Wii, however, looks like it could shake some stuff up.


  5. I’m just not convinced about the use-it-as-a-next-gen-DVD-player angle.

    One of the supposed selling points of both the original Xbox and the PS2 was that they served as DVD players, but the problem was that they both turned out to be lousy DVD players.

    That’s the problem with all-in-one devices — jack of all trades, master of none. I’d much rather have a couple of different devices that actually do their jobs well and let me pick what features I’m willing to pay for rather than one gigantic box where I get whatever features Sony decided I needed.

  6. Yeah, but I think the DVD capabilities in both cases were afterthoughts., and DVD player had been out for a while. With the PS3, the Blu-Ray is front and center, and it’ll be its debut. I suspect it will be a good player.

  7. Of course, the Blu-Ray thing will become far less a factor if HD-DVD ends up winning out as the dominant format. Have you written anything on that battle, John? I did a google search but didn’t come up with anything.

  8. I’ll be buying a PS3 pretty much as soon as I can get one. One reason for this is obvious — I write for Official US PlayStation Magazine, so, you know, I have to. For work (bwa ha ha ha ha ha ha hah!)
    So, not only do you have an excuse to buy one when they come out, you can write it off on your taxes as a business expense!!

  9. OTOH, if HD-DVD wins the battle, the PS3 may be one of the only ways to watch the movies which do end up on Blue-ray discs… so while the battle is being fought, stuff gets produced, the demand for the blue-ray stuff drops through the floor (or cuts by half), and bargain basement movies are yours!

    I mean… if HD-DVD wins, you’ll need a player anyway…

  10. The biggest gamble with the Blu-Ray format tie-in is that it could, conceivably, die a Betamax death. It seems unlikely, given the enormous and hardcore following that the PlayStation franchise enjoys, but everyone who still has VHS tapes lying around, or audio cassettes or LPs or whatever is going to be a little skittish shelling out big money for a dual-use all-in-wonder that might wind up a single-use albatross.

    Honestly, I think the next revolution in game/audio/video media is happening, and it’s downloadable. Sony (and Microsoft and Toshiba and all the rest) is tying itself to a media format when the media itself is going to become less and less relevant. Nintendo is light-years ahead of both Microsoft and Sony right now with the apparently-huge catalog of games they’ll be offering through the Wii. Nintendo’s catalog, iTunes, and now BitTorrent will be distributing Warner Bros’ movies and television shows. Those who are going to be most interested in a dual-use machine are also those who are on the cutting edge of digital content. If they can forgo the format wars for clean, downloadable content that they can store (and backup) on whatever they want, then I think that’s going to be the most attractive option.

  11. The problem with the two versions of the PS3 is that the cheaper version can never be upgraded. You can’t add HDMI with a USB adapter. So, if you upgraded to an HDMI supported TV later then you’d have to go out and buy a new PS3. Oy! If you got the cheaper version of the Xbox 360, you could upgrade it later to add all the platnium goodness, thank goodnes. Frankly, I wished Sony and Microsoft didn’t bother making multiple versions.

    Your point about it being a Blu-ray player and a gaming system sounds good, but I’m waiting to see who wins the format wars before investing in hardware and movies. Also, Sony has had bad luck with consumer formats (Beta, MiniDisc, UMD).

    I’m most excited about the Nintendo Wii. It’s most likely going to be much, much cheaper then the 360 or the PS3. It has a very unique controller that’s getting great reviews and looks like a lot of fun, and the virtual console is a dream come true. So far, the Wii is the only system I’m planning to buy (and an Xbox 360 when GTA4 comes out next year!). Sorry, Sony.

  12. I already decided–I sold my Xbox 360 (disappointing) and am avoiding the PS3. I don’t need or want another DVD player–if Blu-Ray and HD-DVD can only display natively at 480p, what’s the point? I’ve been through this rebuying crap too many times before. I’m not going through it again.

    If anything, I’d be more interested in the Wii.

  13. I think 500-600 dollars is ridiculous for a game system AND a next-gen DVD, especially when the next-gen has not been agreed upon by the market, does not have a large library of titles and is beyond what most people “need” or indeed have the capability to exploit at this point (i.e. the mega HD TV thing again).

    I’m boggled that people would pay this. Sure, if I had an excuse such as “it’s for work”, but other than that… no freaking way. I can muddle along with standard DVD and HDTV long enough for the blue-laser DVD market to shake out its “standard” and for the price of player to hit reasonable levels. Or for the PS3 to drop about 50% in price, whichever comes first.

    And this from a hardcore techno-geek.

    Also, as a new father, I shudder to think of the day that my son asks me for the $1200 PS7 that will likely exist when he hits his teen years if this shit keeps escalating as it has been.

  14. What will be interesting to see, is how much Sony touts the Blu-Rayness of the console, given that the lower price version doesn’t have an HDMI port. I don’t see Hi-Def dvd’s looking all that great compared to “normal” dvd’s if you’re putting the signal through a non HDMI (and thereby non HDCP compliant) connection. Only time, and marketing materials, will tell.

    Personally, I’m just getting a PS2 now, so I can expect my PS3 right around 2011. ;)

  15. I’m not really seeing the appeal. Last year, Sony appeared ready to lead the pack; now, they appear to be flailing. Blu-ray has (supposedly) caused the PS3 to be delayed, and most certainly is a reason for the high price point. But to what end?

    Previously, the PS/2 benefited from backwards-compatability AND being the cheapest DVD player on the market AT THE TIME. But back then, the industry had resolved their differences and adopted a single DVD standard…and DVDs had killer apps that everyone could appreciate. The PS/3 doesn’t come to the table with that benefit. Consumers are paralyzed with fear of buying the wrong format, with the result that a catch-22 has occurred. No one wants to buy a player without lots of content…but there won’t be lots of content unless lots of players are sold.

    Further, the PS3 has a critical difference from the Xbox-360: the core and premium are the same unit. The only difference is that the premium gives you all of the better add-ons for a cheaper price for purchasing them up-front. The PS3 is offering a version that is physically lacking features in their $499 version, specifically memory-card ports and the HDMI connector. That’s not functionality that you can add later, like a wireless controller or external hard drive. I also think it somewhat wrong to think that someone will spend $500 on a console/blu-ray player, but won’t have access to an HDTV with an HDMI connector…especially with HDTVs coming in under $1000. HDTV units won’t be getting more expensive in the near future, either. As economies of scale continue and the forced march to digital pushes the market, HDTVs will more than likely be much more common in the next five years. Skimping on the HDMI port seems a mistake, to me.

    Like the 360, the PS3 apparently won’t be 100% backwards-compatible. How well it’s emulator will work remains in doubt…as do many details of the PS3, unfortunately. I think the PS3 will be successful, but I don’t think it will be anywhere near as successful as the PS/2.

    Ultimately, I think the real winner this time out will be Nintendo.

  16. The “PS/2“? Heh.

    Personally, I don’t care at all about either the PS3 or the Xbox. Nintendo is the only one of them doing anything interesting. Then again, I’m not a console gamer anyway, so I’m not in Sony nor Microsoft’s target market. I haven’t bought a console since the original Game Boy, but I’m really excited about the Revolution/Wii/whatever.

  17. I would have waited for the PS3 over the XBox 360,

    Me too because of the “friggin'” Microsoft factor but I’ll admit that’s personal.

    For absolute value for the buck I always recommend staying about a year behind the curve as far as electronics go. Obviously this year’s bargain is last year’s hot model. (Get your mind out of the gutter. You know I mean electronics.)

    BUT – having the best, even now and then, sure has an appeal. I think I have a secret weapon this time around. There is a good chance I can split the cost three ways with my two teen sons who have worked some and saved their hard earned treasure.

    Two hundred apiece is doable, and they’d get fair use out of it. Plus I could use my Best Buy reward zone card and earn all the points.

    Now I just have to figure out who will buy the HD TV set.

  18. FYI the 499 ‘Cheap’ PS3 is a total waste of money if you want it for playing Blu-ray Movies in HD. If it doesn’t have an HDMI output on it, you can’t play Blu-ray discs at HD resolutions, you’ll be limited to standard 480p resolution. The reason for this is you need an HDMI output to support HDCP (High definition Copy-Protection). Here is a good link for more information on the clusterfuck that is HD Copy Protection.

  19. PlayStation 3 is going to be great. Blu-ray isn’t Betamax as many say, it will truly be a format that people use. It has so many advantages over Microsoft and Nintendo. Over the Xbox 360, PS3 will have motion detection in the controllers, a 60 GB HD, blu-ray playing (those will cost 700+ when they come out), exclusivity in games, better processor, and the fan base. I can’t wait.

  20. I hate you that you can write off the damn PS3. =) In that jealous I can’t wait to do that someday. Nice write up.

  21. Given the love of their customers Sony evidenced in the Rootkit debacle, I’m afraid I want to see Blu-Ray crash and burn. I don’t trust Sony to be decent or competent.

    It’s too bad, because the PS2 was a great box. Hopefully the PS4 will exist someday.

  22. I agree Madeline. An earlier commentor said he wouldn’t buy the xbox 360 because of personal issues with MS. Looking at all of the policies employed by Sony recently I have to say on personal issues Sony seems to come out looking far worse. They intentionally implemented malicious software and then so bungled the uninstall scheme once they were pressured to release one that an infected system was actually worse off after removing the software. This not only makes Sony look intentionally evil, but also incompitent. Can’t say that’s a company I overly look forward to doing business with.

    Also, as has been pointed out, lacking HDMI is a big deal if one wants to use the playstation as a next gen DVD player. Effectively you can’t.

    Also, seeing comments from the vp in charge of the ps3 trying to justify the price pissed me off. Essentially he said that for the power of the processor and the fact that it includes a next generation DVD drive fans should be happy to pay the price. What that really says to me is that their insistence on including a blu-ray drive whether the purchaser wanted it or not simply so they could leverage ps3 sales numbers in their format war, coupled with the selection of an overly expensive processor (that while powerful, is also complicated to program for) is forcing Sony to charge more.

    Personally, if I could buy a PS 3 for the same price as an xbox 360, sans blu-ray drive (Sony just comes across as too evil for me to trust their format), I would be far more likely to. Games don’t need 50 gigs of storage space. Current gen games take up about 3 gigs on DVDs, which can actually hold 3 times that, so it wouldn’t be a technical limitation to ship without the drive. It bothers me that they want me to pay more so that they can get a competitive advantage in another arena. I’m not inclined to pay for that.

  23. I’m not a game player, and never will be, but game players should be aware of something: Those blue lasers (really almost ultraviolet, 405 nm) are as scarce as hen’s teeth, and each one (about the size of your little fingernail) costs between US$1,400 and US$2,000 even if purchased in multiples of 25 or more.

    These lasers would be highly desireable in many scientific applications, but the super high prices have kept people from using them. So I think a lot of frustrated people are waiting to buy and tear apart Playstation 3 units as soon as they become available, just to get their hands on the laser module inside. Unless Sony pushes Nichia to lower their price for blue laser modules, it may not be easy to find Playstation 3 units for a long time after they are “on the market”.

  24. Using Blu-ray disks for a gamin g has been proven to be pointless. No game would come close to filling the amount of disk space. If Blu-ray loses in the dvd platform war then Sony is screwed.

  25. Ben:

    “No game would come close to filling the amount of disk space.”

    I remember back in 1991 buying a hard drive for my mac and buying the 60MB version on the reasoning that I would never run out of space on it. Ah ha ha ha ha!

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