Sony: Americans not cheap, only American labor

So as we suspected, when Sony UK exec Ray Maguire recently labeled Americans as cheap (with massive land, at least) in an interview with GamesIndustry.biz, he didn't actually mean that we were tacky or spendthrifts -- according to a Sony rep who spoke with 1UP, Maguire was instead referring to the relatively low wages ($5.15/hour minimum wage versus ~$10/hour in the UK) when compared to other industrialized countries. So there you have it, not much to see here really -- though given Sony's almost complete dominance of our Ce-Oh no he didn't! series, it's not difficult to understand why this quote got pulled out of context and bandied about the interwebs like a pre-release iPhone.

[Via Joystiq]

[Trevor @ Mar 27th 2007 6:40PM]

I think it is a little blind to attack the US minimum wage by comparing it to UK minimum wage. The cost of a McDonald's meal in the US is around 4 to 5 dollars while in the UK, it translates to over 8 US dollars!

[ruzkin @ Mar 27th 2007 10:46PM]

Yet in Australia, minimum wage is around $14 AUS (10US) and a mcdonalds meal still only costs $5 AUS (3.50US)...

Seems you're getting ripped off.

[xrmb @ Mar 27th 2007 6:45PM]

So so Sony... are you telling me next that the PS3 is made in US for the USA?

[MacroEQ @ Mar 27th 2007 6:45PM]

I think Engadget was trying to read into something that wasn't there on this one...

[Jumi @ Mar 27th 2007 7:30PM]

spendthrift doesn't mean cheap, instead it means a person who spends money in an extravagant, irresponsible way.

[cs32 @ Mar 27th 2007 8:12PM]

This is BS. European countries have much, much higher taxes and an overall higher cost of living. Petrol in the US is around $2.50/gallon, $7/gallon in Europe. Tax on a car is about the same as the price of the car (meaning 2X the cost), and there are many other costs that we do not have in the US (VAT, for example). So if you make $5.15/hour in the US, then you cannot directly compare that to $10/hour in Europe. You must pay an employee more in Europe for the same that we have in the US. Then there are conversion rates (I assume that you converted from Euros to US$?) There are other factors which makes a direct comparison incorrect.

But even so, what are the odds of somebody who makes minimum wage buying a PS3? A school kid working a summer job? Possibly. A single mother working 2 jobs to make ends meet and put food on the table? Not a chance. Once again, let us use math to prove Sony wrong. Ignoring taxes, if you make $10/hour in Europe, that is 100 hours of working to afford a PS3 (a PS3 is 499 pounds in GB, with an exchange rate of 1.9X pounds/dollars). In the US, the same PS3 is $599, that is 97 hours of work. So in the US, you need to work 3 hours ***less*** to earn the same game system, meaning that it is easier under current wages to earn a PS3 in the US (granted, only 3 hours, but still). What difference does the amount of minimum wage make if the price is the same factoring in exchange rates, you still need to work the same amount of time to buy one? Add in factors like higher cost of living in Europe, and the scales tip more in favor of buying one in the US.

And of course, as one Sony exec said, people will want to get extra jobs to buy a new one - (something that is illegal in France, I may add). This is just another elitist Sony exec telling everybody that the PS3 is too good for them, and when he gets caught, they try to weasel their way out of it with misdirection.

[Sean O @ Mar 27th 2007 8:53PM]

In Europe (and Canada), cars are generally much more fuel efficient. Public transportation is more readily available, so you technically don't even need a car - which could be considered a luxury item. Health care is also free. The cost of living depends on what your costs are. Take someone living in the US. He drives a Ford F150 to work. His wife has cancer and for whatever reason their insurance won't cover it. Don't know about you, but I say $80,000 in medical bills kind of trumps the money he saves in gas and auto taxes.

The $5.15 minimum wage (Congress has passed a bill to raise it to $7 next year) was an embarrassment to our nation.

[treetrunk @ Mar 28th 2007 4:39AM]

@cs32:

Rather than "proving Sony wrong", I'd say you've actually proved their logic on pricing is absolutely right. In terms of number of minimum-wage hours worked (so at least legally the "worst-case scenario") the consoles cost virtually exactly the same in both countries. Ok, it isn't exact, but that's just from rounding to the nearest $x99.

Comparing living expenses is another debate entirely- there's far too many factors to consider and it depends massively on lifestyle and where about in each country you live. Overall I'd say the /average/ cost of living in the US is probably lower as a proportion of income (the southern states push it down, the cities push it up), while in the UK at least under the current left-wing administration the cost for most of us is slightly higher, apart from for those on the "bottom rung" whose "expenses" may well be zero to negative as a result of all the handouts and "benefits" paid for by the rest of us.

[kingofwale @ Mar 27th 2007 8:18PM]

here in Canada, minimum wage is 8 bucks, that's close to 7 dollars US.. McDonald costs close to 4 dollars US. our PS3 costs just a little less than US.

I guess that US minimum wage is pretty low. but let's be fair, how many people earning minimum can afford a PS3 or a Xbox360?

[Nobuyuki Idei @ Mar 28th 2007 1:00PM]

Take someone living in the Europe. He takes the bus work. His wife has cancer and for whatever reason the public health care system has a 5 year waiting list. Don't know about you, but I say a dead wife kind of trumps the all the money he pays in taxes.

What's embarrassing is Congress interfering with the free pricing of goods and labor.

[eyesgogo @ Mar 27th 2007 9:03PM]

^_^ Laughter linked to health, happiness ^_^

[b @ Mar 27th 2007 9:10PM]

their minimum wage is double because everything cost double...i've been it was pricey

[Mia @ Mar 27th 2007 9:26PM]

A Humorous article about the Sony Interview

Sony Needs to get Smarter People to Interview

[Mia @ Mar 27th 2007 9:26PM]

Humorous Article About the Sony Interview if you're interested:

Sony Needs to Get Smarter People to Interview
http://www.microsoftisawesome.com/2007/03/interview-with-sony.html

[Paco @ Mar 27th 2007 10:51PM]

Yes, We are cheap. It does cost a lot less to live here in the US, generally, then it does to live in Japan or Western Europe.

All the temps we have at work from India, 8 in my department that normaly has 6 people, love it here. Everything is so cheap they say. They are buying loads of stuff and sending it back home to keep or sell for large profit.

[Leon @ Mar 28th 2007 12:48AM]

Would everyone please calm down? You are all missing the whole point of the quote, and the post by a few hundred miles.

Sony is a global company in the business of making money. They know that in america people make less (when the exchange rate is taken into account), therefore they have to lower the price of their console because otherwise no one will be able to afford it. In European countries, people make more (when the exchange rate is taken into account), therefore they can increase the price of their console so as to make more (or rather, lose less) money. This is not exactly a new idea. Where do you think the cost of living comes from? I don't think I need to go into that do I? That's what Wikipedia and common sense is for.

[Jerome @ Mar 28th 2007 5:10AM]

@ CS32...some slight corrections. We do have VAT, yes, that's built into the price though, not like the sales tax in the US which goes on at the register. Despite that, the PS3 is £425 (or cheaper) in the UK, not £499. Before sales tax it's £350. Surely what's actually relevant, though, is the average wage, not the mimimum, since that shows actual spending power. Average weekly wages in the UK in 2006 were £447, or $881, and in the US, $574 (latest figures were for Feb 07). I think that reflects pretty well my experience of buying groceries and gas in the US vs. Britain - most places in the US are that much cheaper. That's why it's such fun for us brits to holiday in Hawaii and no fun for you guys in London. I would very much refute that our current administration is left wing though...

[SKO @ Mar 28th 2007 10:30PM]

There is no waiting lists for emergency care. You are just a complete utter liar and you should be ashamed of yourself.

[Nobuyuki Idei @ Mar 30th 2007 3:45PM]

Cancer is not considered emergency care. You damn well know this and should be ashamed of yourself.

[David @ Mar 29th 2007 12:46AM]

Most americans are cheap, and whiny. Also the price of things varies a lot by where you live. I live int eh bay area, cali so things are pretty expensive. Our minimum wage just went up to 7.5/hr tho. Of course thats not nearly enough to live on but its quite a bit more than teh federal one.