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.