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Sony Kills Cheaper PS3

Sony announced late last week that it was discontinuing sales of the $500 PlayStation 3, the 20-gigabyte version, due to low sales. According to Engadget, the $600, 60-gigabyte PS3 was outselling its slightly cheaper sibling by a factor of 10 to 1, forcing the dropping of the axe.

Why?

It honestly doesn’t make much sense. The differences between the two consoles were tiny, making it just plain confusing that people would be willing, 10 to 1, to pay $100 for forty gigabytes (forty gigs that are underused, compared to the Xbox 360 and its video marketplace). The only theory that holds up? The only people buying the PS3 were affluent people (since $500-600 is too much for the average consumer), and they didn’t care about an extra hundred.

This is great news for Microsoft. MS can now point to the face that there is no PS3 of comparable price to an Xbox 360. The Core system is half the price of the PS3, the Premium is $200 cheaper, and the Elite is $120 cheaper. The PS3 isn’t even close, and without the 20-gig version, it will likely never come close within the entire lifecycle of the console. That’s a huge PR advantage for Microsoft, one Sony should have tried harder to hold onto.

I’m guessing Sony’s biggest motivation was that, if the PS3 is having enough trouble piling on the sales, at least they should go with the higher margin console. Didn’t they remember that it’s more important to get the damn thing in customer’s hands than to increase your margins? It’s the market share, dummy!

UPDATE: Now Sony is reportedly considering an 80-gig PS3. Maybe they’ll discount the 60-gig a few bucks and release the 80-gig at the current price. Of course, why would the 60-gig sell? Weird.

April 16th, 2007 Posted by Nathan Weinberg | Sony, Xbox 360, Xbox | no comments



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