Streamlined PS3 production may facilitate price drop in '07
byBlake Snow||January 30th 2007 at 5:15pmJanuary 30th 2007 5:15 pm
After a slight decrease in Sony profits largely attributed to the costly and soft-selling PS3, industry analysts maintain that perhaps an early PS3 price cut in 2007 may still be possible due to streamlined production. Said Colin Sebastian of Lazard Capital Markets today: "We believe it is too early to rule out a PS3 price cut for later this year, which will depend in large part on retail sell-through trends, the evolving competitive landscape, and Sony's willingness to endure further losses on PS3 hardware, offset by potential component cost savings." Keep in mind this appears contrary to what Sony chief executive Jack Tretton said in response to early/easy PS3 price cut questions last week. In short, he said "no."
Sebastian also believes Sony may drop the PSP's price to help boost its sales. Granted, there are other ways to increase a product's value proposition without lowering its price; in this case they're called games. But at the moment (and maybe the foreseeable future), both the PS3 and PSP are widely viewed as not having enough games to encourage consumers to lay down cash. Hence, an early price cut may be the quickest route to a spike in sales.