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PS3 Model Reduction

ps3Since its release in November 2006, one of the questions that’s followed the Sony Playstation 3 (PS3) platform has been whether the choice to offer  two versions of the console (varying primarily by the size of the hard drive and the inclusion of built in wireless support) was a wise product marketing move.

At the time of its initial release, a parts shortage attributed to laser parts for  the BluRay DVD player was slowing delivery on the boxes.    There was also heavy competition from the newly released Nintendo Wii and from Microsoft’s Xbox 360.

With a price difference between the two Playstation models of about $100  there was a question of whether consumers would find the value propositions distinct enough to influence their buying decision.  

Was $100 and a few features enough to segment the market and capture two different types of buyers?

Or was it more likely to confuse buyers? 

Did the 2 models exacerbate the supply shortages and partly undermine initial sales?

Last week Sony answered some of those questions; particularly the first.  The PS3 20gb model was discontinued.  According to the Sony Computer Entertainment America spokesman, the 60gb PS3 has outsold its 20gb sibling by a factor of 10:1. 

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