Tech News
Sony: Sales, Lies and Videogames
By Stevie Smith
Jul 17, 2007, 13:17 GMT

It has been a confusing few days for videogame consumers during the frantic roller coaster hype of the E3 Business & Media Summit in Santa Monica, particularly for those pennywise consumers watching and waiting expectantly for a PlayStation 3 price drop.

The first wisps of contention and confusion arose immediately prior to the high-profile annual industry event, when Sony Computer Entertainment reversed its ‘no PS3 price cut’ standpoint and announced the existing 60GB model would fall from $599 USD to $499 USD.

That price cut had been uncovered (and stringently denied by Sony) a few days earlier following the online appearance of leaked retail flyers from both Circuit City and Best Buy. The flyers in question, which were scanned for all to see, clearly proclaimed that a $100 USD price reduction was due in mid-July.

Naturally, consumers sprang into action when Sony then announced a $100 USD cut was indeed being applied to its 60GB PlayStation 3, and that the larger 80GB model would be sliding into the US market at the old $599 USD price slot. The sales performance of the 60GB model duly rocketed with retailers; online giant Amazon.com registered a massive jump of 2800% during the first day.

However, barely a week later, news reports began flooding the Net claiming that the $499 USD 60GB PlayStation 3 was no longer in production and would eventually be replaced in the United States by the $599 USD 80GB model when stocks had been exhausted by the revamped price. Once again, Sony quickly moved to deny the reports, citing on its official SCEA blog that comments made by one of its senior European executives had been taken out of context and that 60GB supply was plentiful.

True to form, Sony Computer Entertainment Inc. president Kaz Hirai then promptly confirmed that the 60GB PlayStation 3 is indeed no longer in production and is to be phased out in the US in favour of a one-price strategy. And that price is $599 USD.

But not for long according to Wedbush Morgan industry analyst Michael Pachter, who has this week suggested that once the 60GB model is no longer available at retail, the 80GB PlayStation 3 will be reduced to the more attractive $499 USD price point. Pachter’s view echoes that of Capcom’s chief financial officer, Kazuhiko Abe, who last week stated that he expects the PlayStation 3 to take a second price cut before the end of the year.

Pachter also predicts that a rival price cut will come for Microsoft’s Xbox 360 console around the same time that the 80GB PS3 is shifted down to the $499 level.

The Wedbush Morgan analyst confidently forecast that Microsoft would undercut Sony at the recent E3 event in California. That did not happen, according to Pachter, because Microsoft has recently revealed a hardware malfunction bill of around $1 billion USD related to reliability problems with its Xbox 360.

But what of those on-the-fence gaming consumers considering their options in terms of waiting on the 60GB opportunity in favour of a (rumoured) 80GB price drop that may or may not arrive before the close of 2007? Well, if they have a substantial PlayStation and PlayStation 2 games catalogue, it’s perhaps worth bearing in mind that the 80GB model utilises software emulation, whereas the 60GB model relies on the PS2’s emotion chip in order to deliver backwards compatible play.

While not a make or break deal in an overall package sporting the hugely powerful Cell processor and an onboard high-definition Blu-ray player, Sony advises that it is an element that may cause games from older systems to "perform differently" or "not perform properly" on the 80GB model.