Sony's Stringer dismisses PS3 price-cutting threats by noisy Activision CEO
We can attest that Howard Stringer, CEO of Sony, is a pretty nice guy. But all the PS3 price-cut chatter from industry analysts and gaming execs seems to have the man riled as he tries to keep Sony afloat. Responding directly to Robert Kotick's threat to stop developing Activision titles on the PS3 (and PSP) due to the console's relative high price, Stringer told Reuters, "He likes to make a lot of noise. He's putting pressure on me and I'm putting pressure on him. That's the nature of business." When asked about the logic of not cutting prices, Howard said, "I (would) lose money on every PlayStation I make -- how's that for logic." True, until the 45nm Cell processor launches allowing for a cheaper, cooler running slim PS3 later this year, right Howie... wink, wink?
[Via GameDaily]
[Via GameDaily]



















Reader Comments (Page 1 of 3)
nvidiagtx @ Jul 8th 2009 4:26AM
So price cuts are a no go?
Karl UK @ Jul 8th 2009 9:18AM
Even if the PS3 Slim were announced later this year or some time 2012 I would expect: Slim PS3, we've got rid of that pesky disc drive and included some sort of downloadable games for bought optical games scheme; All for an extra £100 on top of our old price.
digitallysick @ Jul 8th 2009 4:33AM
Im ok with no pricecut, just keep making different bundles with blu ray movies, or games. Until they get better processors 45nm
Phillip @ Jul 8th 2009 4:34AM
How is a large install base that purchases more games and blu ray titles equal to loosing money?
Muu @ Jul 8th 2009 8:45AM
1) It takes a while for the new customer to buy enough games to justify the price cut. Sony does not get $60 for every game sold, and used games that are very popular now with the downturn and all nets them nothing.
2) While you may get, say, a 25% boost in customers by chopping off prices, that means that there were plenty of people willing to pay the full price pre-cut. You're essentially throwing away money for those folks, as even if they buy another game with an offset of a, say, a $50 cut, the supposed 15% royalty fee Sony gets per game only amounts to $9 per copy of a $60 game. And how many people go around buying an extra $300 of games because they saved $50? probably not too many.
Basically, if they were either in a dominating or profiting position a price cut wouldn't affect them so much. Unfortunately Sony is bleeding cash, and if you've listened to any of their conference calls (available in both Japanese and English w/ real-time translators btw, and so full of mystifying talks from Sony execs that it makes you wonder why english gadget/gaming blogs never pull off 'best of' articles from them), financial firms have been extremely critical of the money-losing operation that the games business has been recently. The effects of a price cut would take a while to be noticed, and with these people assaulting the PS3 for still costing more to make than sold, theyw ould not be pleased with a cut in price. Stuck between a rock and a hard place is really where Sony is at currently -- whichever option they choose someone that's vital to their success is going to get pissed off.
I still believe a price cut is coming, but it'll be interesting to see what kind of an explanation will be made when the end-of-quarter hits. Who knows, if the Slim can be made for a profit they could make all parties delighted at the outcome.
solmar @ Jul 8th 2009 10:32AM
"Thats's the nature of business". What he forgets to mention is that losing money selling consoles is the nature of the console business. Nearly every company loses money, especially in the initial period. You could argue that since you're the manufacturer, you don't want to lose money on the console, but that means that you don't sell enough consoles, and so don't have a user base, which means that you (and other software developers) don't sell much software, which is the real source of revenue. This is especially true on the PS3, which has virtually no piracy, and so it's software sales is in direct relation to its hardware sales. No matter how you cut it, the PS3's current price point is too high compared to other consoles, and so is restricted to only a small part of the total market (very,very small, if you compare it to the Wii's sales). Coupled with the the fact that the majority of its games appeal to the hardcore market, the result is a console that's just not appealing. Before, it was a nice Blu-ray player for the price, but with $100 players coming out, that's not true any more. The new motion-camera control might help, but that's a long way in the future.
Consoles drop in price, because they're not new anymore, and because manufacturing becomes cheaper. Keeping them at the same price point just isn't competitive, and that's "the nature of business". If Stringer doesn't see this, then he's not worth keeping in the company, and it's no wonder that Sony is faltering.
Adderz @ Jul 8th 2009 4:36AM
SOny are going to have to lower their prices by a lot more than $100 if they intend to compete at all in the lower end of the market. The cheapest xbox is now $230 here in Australia while the cheapest PS3 remains at around the $650 mark.
Im in the market for a new console, im selling my Wii due to the lack of good mature titles and the fact motion control "ain't all that yo". Why would i pay $650 for a console when a $230 plays exactly the same titles?
The whole "premium" image Sony has going at the moment is starting to get annoying. Especially when their tv's, computers, game consoles, cameras and most other electronics offer no real advantage over the competition.
Adderz @ Jul 8th 2009 4:39AM
Lets also just be clear im aware the Xbox Arcade offers less than a PS3 but at the end of the day all i want to do is play games, ive done the whole media streaming, playing dvd's on the console, connecting to my camera thing and it gets old quickly.
With very few titles that are exclusive to PS3 and fewer that are any good, it does make sense for most people to spend the extra, unless of course you have the cash and are willing to spend it on a game console, im guilty of buying things because they are pretty, i do buy Macs after all :-P
JZ @ Jul 8th 2009 5:19AM
I suggest Adderz that you apply for a job at the financial department of Sony as you have a better insight what they need then they do themself... C´mon ofcourse those who depend on the PS3 will ask for lower prices to get more sales but in the end Sony most likely knows best what the right pricing is.
Also dont forget that Sony still milks the PS2 and probably expects the PS3 to go for another 6 to 8 solid years. For sure the technolegy has the space for doing so while the xbox already hit its limits.
Adderz @ Jul 8th 2009 5:50AM
"but in the end Sony most likely knows best what the right pricing is."
Obviously they dont. Just take a look at the "one billion dollar loss" linked in this very article.
Im not saying i know better than trained professionals, but from what i can deduce, selling products on brand ALONE will not save you in a market where consumers are considering every purchase they make.
Of course people well compare my statement to Apples continued success but they do offer products the competition doesnt have, unlike Sony.
Eddie @ Jul 8th 2009 4:37AM
I think if Naughty Dog can create games as good as Drake's Fortune and Amongst Thieves using the PS3 tech to great critical acclaim then Activision really are just making themselves look bad as they are making it widely known that they want to make an easy buck with less R&D rather than put in the time and effort and make a technological masterpiece that people will enjoy and remember. Activision are HUGE as well, this should totally be a non-issue for them.
Darthweder @ Jul 8th 2009 4:58AM
So did you mean to leave out the whole part of your argument that's about money? Because I'm pretty sure that would be why Activision would stop development on the PS3, not because they lack the ability to make games that push the ps3
alberto @ Jul 8th 2009 5:01AM
Activision only worthy game has been Guitar Hero. Who cares about Activision.
majorscruff @ Jul 8th 2009 7:20AM
You do realize that no activision means no call of duty right?
Muu @ Jul 8th 2009 9:00AM
The extra effort spent on multi-platforming a game could be spent elsewhere, such as creating new IP on a more financially accessible console, or making that blockbuster title even more blockbusteresque. There's lots of things that can be done with money and resources, and while it's certainly not the only factor, concentrating higher amts of resources on the more profitable ventures is probably a better idea than the other way around.
NoelSM @ Jul 8th 2009 4:39AM
Hes right when he says a price cut right now is not logical because he would lose money on every PS3 sold but he has to remember he also doesnt make money if he cant sell a PS3(high cost = low PS3 sales). But i quess we have to settle for the PS3 bundles for now. Killzone bundle anyone?
IseWise @ Jul 8th 2009 4:40AM
Of course he didn't announce a price drop yet, they still want to sell the units that are in stores right now. Think about how Apple announces price drops, they don't, until it happens.
Contactus @ Jul 8th 2009 5:12AM
Like everyone else for me the killer app here is games. I had a PS3 and then lost my job. I was able to sell the PS3 and buy a new Xbox 360 with the exact same games I had for the PS3 and pocket £200 ($320). The PS3 needs to wake up to itself, bar blu-ray which lets face it is rapidly loosing ground to HD downloads, it offers nothing new.
I hate Microsoft with a passion and admit to being a real Mac-head but right now no one will prise that noisey 360 from my sweaty palms.
Mars Hill 17 @ Jul 8th 2009 2:33PM
So tru Contactus...
I made a comment so long ago when Sony's blu ray and HD dvd's were battling for consumer ownership, that HD downloads were the future. I even questioned why Microsoft backed HDDVD when they had DLC, especially HD DLC. But i digress. So, i went into my local Fry's and wanted to get a PS3, but the high price got to me...plus the only game i would want to play is GOW3. i cant see paying that much for one game only to see PS3 slim come out. i rather wait or save up and buy a cheaper blu-ray player and a new led lcd tv.
Eldiablo @ Jul 8th 2009 5:39PM
If only we had Netflix in the UK, then you'd be 100% on the money. Hopefully when Sky Anytime comes out on it, it will address the lack of decent rental movies and other video content.
I looked at the PS3, and it may have hardware specs, but you have to look at the price - 360 Premium is currently £160 and the PS3 is £280 at Play.com. Is it really worth the extra £120 (the cost of a DS or a 2nd hand wii)? I certainly don't believe so. Maybe bachelors can justify the extra expense, but parents doing the buying will go into a shop, look at them side by side and go for the 360, especially in these times of weakened economy, where the difference in capabilities is minimal (other than the blu ray).
And regards the RRoD, mine failed 2 years in, and Microsoft swapped it out for a new (or at least 100% reconditioned) model, so I've no complaints.
I may have been swayed to the PS3 if two of these conditions was met:-
1) It was £60 cheaper
2) Linux had access to all of the SPE's .
3) Grand Tourismo 5 wasn't vapour ware...
Perhaps the PS4 will sway me to Sony (hopefully they'll survive the recession).
Dustin @ Jul 8th 2009 4:49AM
It's ok. PS3 Slim. $299 this holiday. TGS
deanb @ Jul 8th 2009 5:05AM
I don't think the Slim will be the one with the price drop, but a TGS announcement for a price drop on at least the fat is pretty much guaranteed.
Consoles sell less units during the summer compared to pre-xmas run-up so it only makes sense to announce a price cut at the Pre X-mas TGS(Tokyo Game Show for those out the loop)
360 price cut last year was September (Pre-Xmas) so why anyone with 2 brain cells expects Sony to do a price drop in the middle of the year is beyond me.
alberto @ Jul 8th 2009 11:24AM
Ok, who cares. I bought his stupid PS3, had for a year and then returned the blu-ray drive replace. I just found it so convenient that they had this massive organize effortless system to fix the PS3s. Hmmm. Like they already knew it was going to happen. Instead of stepping up and admit they installed faulty drives in the consoles in the first place. They went ahead and profit from it charging a flat fee of $150.00 to fix it.
So claiming a price cut will eat up his small profit margin. I guess he hasn't milked enough money out of his consumers yet. Why not concentrate in making great games. So far am not impress with the overall collection of games PS3 has.
FYI. Yes, I know there are some great games...like metalgear and resistance. But there are only a hand full in a sea for 100s of bad and boring titles.
Sphenster @ Jul 8th 2009 5:38AM
I've had a 60gb PS3 since launch, and know people who also had launch systems, and they're all working fine.
You might have gotten a bad device, but it happens, and any company needs to be prepared. They don't announce it because it isn't a big problem.
Now Microsoft, and the 4 RROD Consoles I've gone through, are another story all together...
As for Shovelware, It's Shovelware. It happens on any console. Just be happy this isn't the Wii...
aznjohnny @ Jul 8th 2009 4:51AM
I told myself as soon as the price drops to 300....i'll bite and buy one. But till then, the PS3 isn't worth it for me. I might want a PS3, but I sure as hell don't need one when I already have other consoles to keep me entertained.
Han Solo @ Jul 8th 2009 4:52AM
I'm not going to argue with that.
DR House @ Jul 8th 2009 4:56AM
Yes they are fucked that everyone and his mother is crying so bad for a ps3 even companies are crying for price cut XD
Sony is doing fine and btw SONY RELEASE GT5 For the love of god ;(
Notung @ Jul 8th 2009 4:59AM
It is kinda funny that you lately show this photo of Sir Howard with an open door behind him, it is like somebody's showing him the way out...
We should be able to rate pictures based in the our perceived connotation...
Regarding the issue here, yeah, it is time for a price cut, even if they are trying to make some extra money from customers for the money they've lost in the first million of units, internally speaking they hardware is a bit dated, they should have been able to improve manufacturing costs, with cheaper and better components (45nm or whatever), and pass part of that savings or potential profit to customers. At least they should drop the price in order to get some market share back, but that is up to them.
The truth here is that us, customers, have an alternative in the hardcore game space (the XBOX), and alternative for the casual kiddy demands (Wii), and many frackin alternatives for the VoD. If they don't want to sell their ecosystem to us, it is OK, we could very well live with their sustitutes (that some of us could argue that are even better)
Their old gaming market share at this pace will rest in peace soon (as their walkman share did), and of course I am perceiving the same pattern on the TV side. Once that last one is done, the old SONY will shut the door and be bought by a cheap taiwanese brand, quite an achievement for a japanese company
m16Jesse @ Jul 8th 2009 9:07AM
Are they not losing money with the PS3 anymore?
atx1980 @ Jul 8th 2009 10:25AM
Last I heard that it cost them. $449.00 to make on.
KIFF @ Jul 8th 2009 5:01AM
Activision should look at their own behaviour before criticising Sony. £108 for DJ Hero (basically a plastic toy) in the UK is a huge rip-off. You can buy either a PSP Slim or DS Lite for that.
Gert @ Jul 8th 2009 5:03AM
http://www.sijun.com/dhabih/portfolio/images/gman.jpg
TimmyRaa @ Jul 8th 2009 5:03AM
That's sad that they've admitted to barely scraping a profit on the console, even at the extortionate price they are.
Before I get flamed by PS£ owners (have you ever noticed that if you hold down shift when pressing P then S then 3 on a UK keyboard, you get PS£?) about how it's technically far superior to everything else in the world, and so of course it costs more, scrotal surgery is technically brilliant and costs a lot, but it doesn't mean I want it.
PS. I would like a PS£ though, just not at these prices; the "technical brilliance" and lack of decent games just isn't worth all the extra money.
moooxooom @ Jul 10th 2009 3:23AM
heh a delayed reply for you..
http://www.engadget.com/2009/06/19/iphone-3g-s-fizzles-out-for-global-retail/comments/20032574/
Anyway, the lack of "brilliant" games is subjective. For example, I wouldn't call wii games brilliant, but i can't argue with the sales figures..
Lando Calrissian @ Jul 8th 2009 5:10AM
@DR House
I wouldn't call a -98.9 billion Yen net loss "doing fine".
(http://www.wikipedia.org/wiki/Sony)
DR House @ Jul 8th 2009 5:15AM
PS3 is actually cheap unlike the xbox360 with its hidden fees after you buy the console
Xbox 360 charge 50$ every year for online service unlike the ps3 (totally free on the ps3)
Xbox lack wireless, need to buy 100$ wireless add on unlike the ps3 with built in wireless
Xbox 360 plays old Gen media "DVD" ps3 plays next gen media "BLU RAY" and can play DVDs too
XBOX360 HD is super expansive if you wanna upgrade it (100$ for a 120gb max vs sony 500GB for 60$)
XBOX360 kills your DVDs over time from scratches and its noisy unlike the ps3
XBOX360 RROD search about it.. the system DIES easily from normal use
XBOX360 lacks internet browser and many other stuff on the ps3
XBOX doesnt let you play games you bought online unless you are connected unlike the ps3 (can even share games on ps3)
XBOX360 Cant do TRUE 1080P its upscaled unlike the ps3 with true HD video and true HD sound
XBOX360 is weaker system graphic wise "Look at killzone2/Metal gear4/Uncharted/etc
XBOX360 will be replaced with new xbox at 2010 while ps3 is staying for many more years just like the ps2
etc too lazy to tell you more
Yeah which console is overpriced now?
G @ Jul 8th 2009 5:16AM
Isn't that the razor blade model? They lose money on the console and make it up on game license fees. That's why we're paying $60 for a plastic disc now, right?
DR House @ Jul 8th 2009 5:18AM
Lando ever heard of the recession? plus that loss was from the whole sony company, the gaming division is doing fine actually
ben @ Jul 8th 2009 5:23AM
Why on earth have Sony gotten themselves into this situation? The original xbox made a loss on every console sold for ages, and although yes they had the backing of bill gates' pockets to keep it rolling, they made some pretty sensible decisions regarding XBL and the pitch of the console which won over previous PS lovers.
I think half the problem is that many of those people then went out and bought a 360 and have been happy with it ever since, not finding the need for BluRay, and not being compelled by any of the exclusives for the PS3.
Personally I am sad, so I have both consoles, which is the one I play games on the most? The 360, by a long way. To me my PS3 is a glorified media hub as that is largely all I use it for, streaming movies, watching blurays, maybe watching internet based content through my TV. As for gaming nothing has grabbed me and made me think, WOW what a console, and the online experience leaves ALOT to be desired. It makes you realise straight away that XBL is actually worth paying for.
Some people have talked about faulty bluray drives. I think they are missing the point here. They aren't faulty as such its just that as bluray is still rather new, no one has developed a drive that they know to last the distance. A friend of mine has had to have his blu-ray drive replaced once already but that is only because he insists on playing gaming sessions sometimes lasting longer than 12 hours. Should the hardware really be expected to deal with this kind of constant strain/heat etc. Now his "repaired" PS3 sounds like a vacuum cleaner, I suspect they installed some larger fans, or made the heat-sensitive trip for the fans lower so as to keep his console cooler and not risk the BD drive failing again.
I have not had these problems myself, but then I never play a game for more than a couple of hours straight before having a break, so I haven't exactly put my PS3's drive under the same stress as my friend and many others may do.
Is Sony going the way of the do-do? Possibly, but if the PS3 is not making them money, surely their other arms such as computing/Tvs/Cameras do? IF they are loosing money in all sectors then they need to rethink their entire strategy, something that dropping memory stick altogether hints at.
Sony need to do less proprietory bullshit and stick to making things that look good and function well, rather than re-inventing the wheel. Why did they make the Vaio P series when they could have released a much cheaper and probably much better selling netbook..... Oh wait, they are now.
Ben
TimmyRaa @ Jul 8th 2009 5:24AM
@DR House
I'm not going to respond to each and every one of your "points", but suffice to say that half of them have nothing, zero, zip, zilch, nil, to do with price, which seemed to be your initial argument regarding the PS3 being cheaper in the long run than the 360. The majority of the remainder are either irrelevant, petty, or just plain wrong.
But well done, you have made maybe one or two good points there.
rob @ Jul 8th 2009 6:08AM
How do his points have nothing to do with price? The price we pay for a console is for the accessories/features and the experience. I'd say paid online play vs. free online play, paid wireless adapter vs. free wireless adapter, and the many more points he had are part of why I paid for a PS3.
All of you are just falling for the pitfall of the common denominator, Microsoft.
TimmyRaa @ Jul 8th 2009 7:29AM
@rob
Read what I wrote; "half of them have nothing, zero, zip, zilch, nil, to do with price", and then re-read his points:
"Xbox 360 plays old Gen media "DVD" ps3 plays next gen media "BLU RAY" and can play DVDs too"
What does that have to do with money or cost, unless you wanted a Bluray player in the first place?
"XBOX360 kills your DVDs over time from scratches and its noisy unlike the ps3"
Ignoring the fact the scratching point is incorrect, what does noise have to do with money or cost?
"XBOX360 RROD search about it.. the system DIES easily from normal use"
Something they no longer suffer from, but even when they did, they got replaced, for free. So what does that have to do with money or cost?
"XBOX360 lacks internet browser and many other stuff on the ps3"
What does that have to do with money or cost?
"XBOX doesnt let you play games you bought online unless you are connected unlike the ps3 (can even share games on ps3)"
What does that have to do with money or cost?
"XBOX360 Cant do TRUE 1080P its upscaled unlike the ps3 with true HD video and true HD sound"
Not true, but either way, what does that have to do with money or cost?
"XBOX360 is weaker system graphic wise "Look at killzone2/Metal gear4/Uncharted/etc"
Perhaps, but what does that have to do with money or cost?
I make that at least half his points not related to cost or price, so go away and think about what you said.
y3k.nik @ Jul 8th 2009 10:16AM
Buy an Arcade with a larger HDD and a wireless card and a year live subscription and you are pretty close to the ps3 cost.. the rest is just a bonus..
rob @ Jul 8th 2009 10:41AM
@TimmyRaa: Maybe you should be the one to re-read. Go back and read what I said. Those things have EVERYTHING to do with the price. The FEATURES and EXPERIENCE compared to the 360 justifies by FAR the price of the PS3.
Lando Calrissian @ Jul 8th 2009 5:41AM
@House
That's why Sony is screwed, they can't compete in this recession. The PS3 starts at $399, the Xbox 360 starts at $200, the Wii costs $250. Microsoft extended their warranty to 3 years so when your Xbox fails, the one you get back, repaired, isn't going to get the RRoD. The RRoD has been fixed. PS3 AND Xbox 360 games are both made in 720p and scaled up to 1080p if necessary, and the 360 can do surround sound as well, ever heard of optical audio? So what if they can make a game look pretty! It doesn't matter if the game is crap! Unless you play your 360 with your TV muted, it's not going to be a problem. You can play games you purchased off Xbox LIVE while you are offline. I'd like you to name some other features that the 360 doesn't have besides built in browser, which can be done through MCE if you get MCE Browser. Anyways, it doesn't matter how good the PS3's GPU and CPU look on paper, what does matter is that it is a total bitch to program for compared to the 360. PS3 exclusives? Funny joke! Also, Activision and other companies wouldn't be calling for a price cut if the PS3 was doing absolutely fantastic.
coolblue @ Jul 8th 2009 5:57AM
@DR House
Not even sure I should be dignifying your fanboy post with a response, but here goes....
The 360 is not graphically inferior to the PS3, in fact it is practically impossible to tell the difference in the graphics, some games look slightly better on the PS3 others look slightly better on the 360 but many look identical.
The PS3 may well live on well past 2010 but will you still be playing it when the PS4 arrives?
I have not had a single disc scratched by my 360 and neither has anyone I know so it is hardly a big problem (however my PS2 did scratch 2 of my discs).
The RROD problem has now been fixed and the microsoft warranty program is excellent if it does happen.
The 360 my play "old gen" media but this makes it cheaper to produce and provides a quicker data transfer hence the PS3 requiring installs for many games. In my opinion the Bluray drive was the biggest mistake they made on the PS3 as it made it very late to market and uncompetitive on price.
I am not too bothered about the internet browser as I have a PC which has a far better browsing experience than a console could ever provide. I rarely use the browser n my wii.
Not sure where you are getting the information on the 360 not being able to do true 1080p as I can only find articles that say the opposite (although I may just be looking in the wrong places). I would also say that even if it is true it is not a problem as most people would not be able to tell the difference between 1080i and 1080p. In fact I did a blind test with some friends and showed them spiderman2 in both upscaled dvd and bluray and they could not tell the difference (although on very close inspection the bluray version had slightly better colour reproduction and the webs were very slightly more detailed).
Xbox Live is also far better than PSN and although PSN is generally fine you get what you pay for. I wish live was free but I am happy to pay if it means the quality is better.
The two thing that are stupid on the 360 are the lack of built in wireless (and the price of the wireless adapter) and the stupid price of the hard drives. However I have a 20GB version and I am still not finding it a particular problem yet (I would however upgrade if the drives were cheaper). Also many people will just have their 360s plugged in via cat5 which is a more reliable connection than wireless anyway.
The PS3 is a good console and has some great games, but unfortunately there are not enough great exclusive games to persuade me to buy one at it's current price, however if it was cheaper then I may well be tempted.
ratchetnclank @ Jul 8th 2009 5:56AM
Activision make crap games anyway let them leave.
AoMoe @ Jul 8th 2009 6:14AM
The concern of game developers are more about user base than the high cost of the PS3. The game developers seem to believe that it is the high price of the PS3 that reduced the sale of their games. However, have they developed games for the PS3 that have made consumers what to buy the PS3 just to play their games. It is hard to understand by companies like Activision want Sony to lose money so that they can make a profit.
rob @ Jul 8th 2009 6:19AM
I'll put this in terms that are easy for you all to understand.
Xbox360 = Honda Civic
PS3 = BMW
I bought a BMW because I can afford it. Sorry for all you ricers :P
AnnoyingPoster @ Jul 10th 2009 3:52PM
the problem with your analogy is that the ps3 isnt more powerful than the xbox 360, nor is it any better looking really. its only more expensive and flashy with no substance unlike BMWs which are actually good. furthermore, xbox 360 is american and ps3 is japanese, while hondas are japanese and bmws are german. sorry, you fail on all levels, and the ps3 is still overpriced, and sony is still in trouble.