PriceSCAN Blog

On June 6th, I noted that recent cuts in entry level Blu-ray players might presage a cut in the price of the Blu-ray equipped PlayStation 3 (see The Blu-ray Premium: Has The Wii Taught Sony How To Say "Pyrrhic Victory" In Japanese?). Sure enough, Sony just dropped the price of the PS3 by a hundred bucks to $499, and vendors on this site are already selling the console at that price. This still leaves the PS3 about $100 more expensive than the competing Xbox 360 Premium, and $200 more than the Xbox 360 Core system. According to the Wall Street Journal, both the Xbox and Nintendo's less expensive Wii have continued to outsell the PS3, and it appears that by reducing what I've referred to as the PS3's "Blu-ray premium", Sony hopes to remedy this situation. And indeed, Sony's cut does bring the PS3 into alignment with Xbox pricing if you take into account the cost of the PS3's included high-def capability, since the separately sold Xboc 360 HD-DVD drive goes for just under $190, roughly the premium of the PS3 over the Xbox 360 Core.
The fly in the ointment for Sony is that it's far from clear the addition of HD functionality is much of a factor in driving game console shares. Unbundling HD from the console purchase decision may have helped Microsoft, and Nintendo's hugely successful Wii is sans HD altogether. Purchasing a PS3 still makes paying for an HD player compulsory, albeit now at reduced cost. As I've noted before, Sony may view the sacrifice of some game console market share as the price of increasing acceptance of the Blu-ray standard over Toshiba's HD-DVD ("Blu-ray May Avoid Betamax's Fate…Even If The PS3 Isn't So Lucky"). But low PS3 sales intrinsically limit how effective this stratagem can be. Even after Sony's price cut, the question is whether consumers will pay an extra one or two c-notes for a PS3 with Blu-ray when, so far, they've been happy paying less for an HD-free Xbox or Wii.