If a company cuts the price too often they can run into the problem of consumers deciding to wait instead. Why should I buy a PS3 now when I can wait for MGS4 and possibly another price cut? After all, this would be 2 significant price cuts within a single year.
Besides, what happened with their first two SKUs? Sony chose to eliminate the cheaper SKU with a smaller harddrive (something you say they are going to reintroduce) just this past April. If they wanted to, they could have continued this unit and also cut its price by $100...but they chose to completely remove it. Now, one could argue that they simply wanted to force consumers to choose the larger 60gb system. However, a couple months later they discontinue the 60gb and introduce a new SKU with a larger drive, again forcing consumers to choose the larger system. Why would Sony suddenly, and abruptly, make a 180 degree turn? Going from pushing consumers towards larger harddrives and higher price, and moving to a smaller drive with a lower price? This would also contradict their plans for downloadable content (demos, media, online distributed games) as anyone with a full 360 harddrive can attest to.
Their gaming division lost nearly $2 billion US last fiscal year...is there any evidence that the attachment rate for PS3 games is high enough to immediately offset a price cut? If it only moves a few games for each console then they could lose a ton of money. It looks like Sony has already had to consider gutting some of their resources (such as the Cell facility to Toshiba). How much more cash can their gaming division lose before corporate brass gets really worried?
And besides, the price cut to the 60gb version didn't stimulate sales that much. They went up by 60,000 units in July but already lost half of that gain through August.
1
If a company cuts the price too often they can run into the problem of consumers deciding to wait instead. Why should I buy a PS3 now when I can wait for MGS4 and possibly another price cut? After all, this would be 2 significant price cuts within a single year.
Besides, what happened with their first two SKUs?
Sony chose to eliminate the cheaper SKU with a smaller harddrive (something you say they are going to reintroduce) just this past April. If they wanted to, they could have continued this unit and also cut its price by $100...but they chose to completely remove it.
Now, one could argue that they simply wanted to force consumers to choose the larger 60gb system. However, a couple months later they discontinue the 60gb and introduce a new SKU with a larger drive, again forcing consumers to choose the larger system.
Why would Sony suddenly, and abruptly, make a 180 degree turn? Going from pushing consumers towards larger harddrives and higher price, and moving to a smaller drive with a lower price? This would also contradict their plans for downloadable content (demos, media, online distributed games) as anyone with a full 360 harddrive can attest to.
Their gaming division lost nearly $2 billion US last fiscal year...is there any evidence that the attachment rate for PS3 games is high enough to immediately offset a price cut? If it only moves a few games for each console then they could lose a ton of money. It looks like Sony has already had to consider gutting some of their resources (such as the Cell facility to Toshiba). How much more cash can their gaming division lose before corporate brass gets really worried?
And besides, the price cut to the 60gb version didn't stimulate sales that much. They went up by 60,000 units in July but already lost half of that gain through August.