PlayStation 3: Not About Quantity, About Profitability

The Xbox 360 price drop rumors flow like water and it’s all but officially been announced at this point. What about PlayStation 3 and their price? No.

Nobuyuki Oneda, the Sony’s chief financial officer said, “our plan is not to reduce the price. Our strategy is not to sell more quantity for PS3 but to concentrate on profitability.” (gamespot) This makes complete sense coming from their chief financial officer, as their motivation is to make money, not lose it.

The question remains, how will they actually make money if they’re no longer in the race for competitive market prices? Considering game licensing must Net them some amount of profit Sony’s idea seems to be the exact opposite of their original PlayStation method: saturate the market and sell them all games.

So far we’ve seen very few “need to have” games for the PlayStation 3 console while Xbox 360 continues to build a substantial library and Wii continues to break sales records for apparently no reason. When a game publisher has to decide on a platform to launch a new game, why would they choose the one that doesn’t care to be competitively priced in the market? The one that doesn’t care about quantity of sales?

Sony intends to reverse the entire razor blade philosophy where one sells a cheap razor and charges users for the blades over and over again. Their take on this concept is to sell really expensive razors and put out small half-quality blades. Is that a good market strategy at this point?

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It’s amazing to think we’re in our third year of “next generation” console bliss. Three years have passed since the first Xbox 360 shipped, for good or bad, and it’s time to start thinking about the future.

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Bobbie Bach, Microsoft Entertainment and Devices president, seems to believe this generation of consoles will expand out further than the typical four-year release cycle. Perhaps because the console developers have invested so much money in defeating each other in the market and making their console “number one” in the eyes of their investors.

Bach does not believe we’re cresting on the current generation, that is for certain, and we’ve yet to hear any hype over a new next-generation console from Microsoft. They were the first to market so, theoretically, they should be the first in the next-generation as well, right?

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Bach stated that he believes consoles today are competing at different levels than ten years ago. There isn’t one clear winner, there isn’t one dominating console. There will be victors in different areas of the industry; casual consoles, top game sellers, best graphics and others. It’s not about sheer “units sold” it’s more about being profitable and building a community around your hardware, see Xbox Live as a great example.

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(Thanks, 1up)