PS2 price cut may be right move for PS3's future

PS2 price cut may be right move for PS3's future

When Sony teased a "big announcement" last week, many gamers thought the company would finally drop the price of the $400 PlayStation 3. Instead, Sony cut the price of its nine year-old console, the PlayStation 2, from $130 to $100.

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PS2 price cut may be right move for PS3's future

What's good for the PS2 may be great for the PS3, says one DFC Intelligence analyst.

Gamers weren't happy. "Sony dropped the price of the wrong PlayStation," one online commenter lamented. "Will Microsoft slash the price of the original Xbox?" another sarcastically questioned, referencing the rival PS2 system that bit the bullet four years ago.

While dropping the price of the PS2 might not have been in the best interest of gamers hoping for a PS3, it was the right move for Sony's bleeding balance sheet, says market researcher David Cole of DFC Intelligence.

"Obviously everyone wants a PS3 price drop, but profitability is essential for Sony to continue funding the business," Cole says. "The longer they can keep PS2 alive, the longer they have for the PS3."

Indeed, Sony posted its first loss in 14 years this January, partly due to the PlayStation 3, which loses money on every console sold. And PS3 sales have continued to decline this year, according to official numbers supplied by the NPD Group.

Having fallen well behind Wii in the race for bragging rights, Sony has begun emphasizing that the primary goal of the PS3 is to reach profitability. Since the PS2 has been a cash cow for years, it only makes sense that the company would leverage past success to sustain its future, however long that may take.

What's more, Sony officials say the PS2 price cut could siphon away interest from Nintendo's Wii, something Cole disregards. "I don't think it will slow Wii sales, but it could cut into Wii usage, which is becoming an interesting metric to monitor," he says. "At $99, you can expect some people to jump back into the PS2 market (maybe they sold their PS2 to buy a Wii)."

Last September, Microsoft made similar claims about eating into Wii market share, after it lowered the price of the Xbox 360 to $200 -- $50 cheaper than the $250 Wii. But Wii sales actually grew that month and continue to do so despite the Wii's higher price and inferior technical specs. Perhaps Nintendo has more than just price going in its favor.

Comments [16]

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gamerslife2007

Good look at it guys....I'm sure fanboys on both sides will make this into a flame article

Fat_bot

I see the merit in the idea behind keeping profits flowing in, but at the same time propping up one system through increased reliance on an outdated system that is receiving less attention by developers seems to be a poor way to build a strong base for a company's future.

donkeykong57

A PS2 price cut is better than nothing. I think Sony needs to work on cutting back on production costs without removing any features or quality.

ManginaX

Okay, the PS2 was like my favorite console last gen, but keeping it around is just killing the PS3. If a PS2 price cut is helpful to PS3 sales ( which I don't think it will be) then discontinuing it will catapult the PS3 into new territory. .. Really, just bring back BC and be done with it, then you have a PS2 in every PS3 and they can market it as such. If they market it as 3 consoles in one, Mom and Dads might be more apt to shell out a bit more for it.

madeup6

It really doesnt matter. The ps2 is dead and that is why SONY is dropping the price. But dont look for a ps3 price cut anytime soon.

rancidbear

i guess it makes sense that by keeping people interested in the ps2 they will eventually upgrade to the ps3. buuuuuuuuut don't alot of gamers already have ps2s since it was the best selling console of last gen? i mean, i know i have 2, and all my friends have had at least 2, what with systems breaking and all. i guess time will tell.

FreezeEasy

A price drop and a new Jak and Daxter for the PS2? WTF we want games and price drops for the PS3. This is stupid.

duffmanth

I've been saying this since the PS3 first came out, it was worth the price then and is now. You get what you pay for with these consoles. The PS3 is pricey because you get raw power, reliability, a versatile machine, and the best lineup of games out there: MGS4, LBP, GT5, Killzone2, Resistance 1 & 2, and so on. The Wii is $250 because it lacks power and versatility, and the games are trash aside from a few Nintendo 1st party games and the odd 3rd party game. The 360 has a great lineup of games, great online, and is a powerful machine, but I don't want to buy a machine that I could potentially be replacing 2 or more times.

hiphophippy27

FreezeEasy wrote:

A price drop and a new Jak and Daxter for the PS2? WTF we want games and price drops for the PS3. This is stupid.

I was REALLY hoping it was an April Fools joke when a new Jak was announced...but for PS2/PSP and not PS3....

hiphophippy27

darker_ego wrote:

duffmanth wrote:

I've been saying this since the PS3 first came out, it was worth the price then and is now. You get what you pay for with these consoles. The PS3 is pricey because you get raw power, reliability, a versatile machine, and the best lineup of games out there: MGS4, LBP, GT5, Killzone2, Resistance 1 & 2, and so on. The Wii is $250 because it lacks power and versatility, and the games are trash aside from a few Nintendo 1st party games and the odd 3rd party game. The 360 has a great lineup of games, great online, and is a powerful machine, but I don't want to buy a machine that I could potentially be replacing 2 or more times.

This makes perfect sense. But on another part, I disagree. Sony could cut production cost, as I have a laptop with all the features and more that a PS3 has, and the full price of it 350$. If SONY cut production cost, and the price went to 300$ or at least 350, that would greatly help sony.

You have a laptop that can play Blu-ray games? Let alone Killzone 2 and MGS4? Wow, I'm interested to hear about it.

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