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40GB PS3 from Sony?

ps3Is someone at Sony throwing darts and hoping something will stick? It’s starting to look that way with the PS3.  From the beginning the company’s sent mixed messages and the practice is continuing.

When Sony first began selling PlayStation 3 consoles in November 2006 they chose to offer two models. A $100 price difference and 40GB’s of hard drive capacity separated the two.  It was a decision that left consumers scratching their heads instead of opening their wallets. 

By April, when Sony corrected its mistake and discontinued the smaller model, it had been outsold by its sibling 10:1.  

The head scratching started again In July.  Beginning of the month, rumors circulated, and were promptly denied, that Sony was on the verge of introducing a new model and price cut.  Absolutely not, was the official word. A week later, no became yes.  Sony’s CEO for Computer Entertainment America acknowledged a problem and announced “This latest price move is an attempt to try to bridge that gap between what the average consumer can afford and what we, quite frankly, can afford to charge.”  It was also revealed, despite problems segmenting the market before, that Sony was going to try again with a second model (with an 80GB drive) to be shipped in  August. 

It’s now September, and we’re at it again.  According to reports from Sky News in the UK, manufacturing sources in Taiwan are now confirming there will soon be an entry level 40GB PS3.  It is expected for the holiday season and an anticipated price of $399. 

Officially there’s no word, but if the rumor is true, it would fit Sony’s pattern.    Hot Cold, Yes No … more confusion. More desperation.  

It’s an odd scenario for Sony.  On the one hand, the PS3 is tremendously powerful and endowed with state of the art technology (from its graphics processors to its onboard BluRay player). It’s unequivocally a “next generation player.”  It has the potential to be relevant for years and should have a long lifespan to recoup market share and costs.  On the flip side, however, Sony has to compete now. 

When consumers buy a game console, they’re investing not just in the hardware, but game titles as well. The capital outlay can be large.  It’s not something that will be thrown away tomorrow.  It is like an investment.  And just so, with capital tied up in one product there’s little likelihood of a shift to another.   That means today’s Xbox 360 or Wii buyer isn’t going to buy a PS3 tomorrow too.  A lost sales opportunity could carry for a year or two or more.  

In August retail sales, the Xbox 360 outsold the PS3 by more than 2:1.  The Wii trounced it by factor of more than three to one.  With the big holiday shopping season coming up, Sony’s desperation to grab a foothold has to be growing. 

The introduction of a 40GB model would finally give Sony a price competitive model.  The question is, will it help spur sales or just confuse buyers? 

What Sony needs is a plan, one that they’re confident in, one that they’ll stick to, one that may work.  Maybe reworking the product so that price cuts are economically permissible is that plan.  Or maybe one of the darts they’re throwing will stick after all. 

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