Thursday, September 21, 2006

Sound the Alarm, or Sony Proves They Have Ears

Thanks to DQ reader Douglas for e-mailing me this announcement from the Tokyo Game Show:
Both the Associated Press and Reuters are now reporting that the Playstation 3 20 GB will be getting a 20 percent price drop in Japan. That means the lower end PS3 will sell for 49.980 yen or $429 there. No mention of the price for the higher-end PS3 was made likely because in Japan that price is being left to retailers to set.

Here's the full story over at Kotaku.

That is a GIANT price dop, particularly when the console hasn't even been launched yet. That's unprecedented. And they're also apparently including an HDMI 1.3 output. So they dropped the price 20% and improved the specs at the same time.

Now remember, this was the company who claimed that they could sell anything and people would buy it because of the strength of the Playstation brand name and customer loyalty.

Well, apparently not.

Remember that I've mentioned several times in the last few months that Sony must be panicking behind closed doors? In spite of what they were saying publicly, they must have finally understood that the future of Blu-Ray was endangered at the initial launch prices they announced. And their internal tracking must have shown far less demand at the initial prices than they expected.

Panic isn't such a bad thing in this case, at least for us. And that is the first thing Sony's done right in months. At $499 and $599, the PS3 was going to be a boat anchor. Sony's clearly admitted that with this dramatic price cut. At least they've finally acknowledged reality.

However, there's a big IF here. For one, they haven't dropped the price anywhere but Japan at this point (although I expect them to shortly). Even if they do, they said just a few weeks ago that there would be very few 20GB units available at launch--the vast majority would be the $599 units with the 60GB hard drive. So unless they change allocations, this might be a discount that's perfectly available in theory and impossible to find in practice.

Someone asked me if this was in response to Microsoft's announcement that the 360 would support 1080p output via a software update, but I don't think so. Upscaled 1080p output from the 360 was the least of Sony's problems--they were dying the death of a thousand paper cuts, and all of them were self-inflicted.

Hopefully, this stops the bleeding. Or at least starts the clotting.

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