Sony’s second big reveal: $500/$600 price

I didn’t expect Sony to reveal the price or release date for the PS3 this week, but they did. It’s coming out Nov. 11 in Japan, Nov. 17 in the U.S. It’ll cost $499 with a 20 GB hard drive, $599 with a 60 GB hard drive. Blu-ray hurts.

I thought Sony would pull off a $399 launch, but I guess a $1-billion loss on PS3 was enough. I’ve also said that $499 is doable. The $399 iPod really changed the rules of consumer electronics pricing, and $499 is reasonable given what’s inside the PS3.

I’m very surprised Sony is breaking the $500 barrier, though. A $600 game machine seems psychologically very different from $500. If Microsoft drops its premium system to $299 this fall, and Wii launches at $200-$250, that $600 premium PS3 will be a tough sell. Think about it: You could potentially get a hard-drived 360 and a Wii for $100 less than a premium PS3!! I mean, Sony will have a shortage (they say 2 million systems at launch and 4 million by the end of the year, but Microsoft has only shipped 3.2 million in six months so take that with a grain of salt) and will have no problem selling out, but I still see a danger in luxury pricing.

Also, a 20 GB hard drive seems like more than enough, if you can run your computer through the PS3 like you can with the Xbox 360. If Sony comes through with DVR functionality and a viable downloading system, then 60 GB will make more sense. But with Sony’s lousy track record against iTunes, I wouldn’t hold my breath. Why wouldn’t they just launch with one system for a high-but-not-insane $500, and then introduce a 60 GB version when the cost of production drops and they have features that make a 60 GB hard drive necessary?

And this IGN comment worries me: “Looking at the official press site of SCEA, we noticed that the PS3 with the 20 gigabyte hard drive seemed to lack HDMI support [a high-definition connection]. This seems to be confirmed by an offical press release from SCEA. … However, it also indicates that the 20 gigabyte system won’t have Memory Stick, SD or Compact Flash reading capability or WiFi support.” I don’t know enough about high-def to tell how bad a lack of HDMI support is, and a lack of memory card slots doesn’t seem terrible (even though they’d only add a couple bucks to production costs). WiFi seems more important. Regardless, Sony would be making a huge mistake if it shortchanges the 20 GB system in any way. Microsoft releasing a useless $300 Xbox is one thing, because people can stomach $399 when they get the premium system instead. But forcing people to buy a $600 console if they want all the features would be a very bad move. (IGN’s article also mentions that the Blu-ray drive will run at 2x. That’s probably a very good thing, load-time-wise.)

One other thing. The big buzz coming out of Sony’s presentation is on the controller and pricing. Nobody seemed overly thrilled with the games. (Though Final Fantasy XIII, announced at Square Enix’s shindig earlier in the day, seemed to impress everyone.) You can bet people will leave Nintendo’s press conference today practically peeing their pants in excitement over whatever Metroid, Zelda and Mario screens get revealed. And Microsoft could make a daring move like announce a new pricing tier of $299 for the 20 GB system and $399 for a system with the recently announced HD-DVD drive included. I’m sure Sony would have been criticized for not revealing price/release details, but no one really expected that info now. It would have been better to try to wow people with the games and save the pricing news for later.

Don’t forget this is all because of Sony betting on Blu-ray. That bet started for real on Monday, and it looks as iffy as ever.

— May 9, 2006

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