Sony Says PS3 Price Cut Requests are “A Lot of Noise”
Shortly after arriving at the Allen & Co. conference in Sun Valley, Idaho, Sony Corp CEO Howard Stringer had some strong words regarding recent price reduction requests from Activision CEO Bob Kotick.
“He likes to make a lot of noise,” Stringer said. “He’s putting pressure on me and I’m putting pressure on him. That’s the nature of business.” Stringer’s remarks come in response to an interview with Bob Kotick in June, in which Kotick mentioned Activision might seriously consider dropping the PS3 as a platform if costs didn’t come down.
Stringer says the decision to maintain the PS3’s current price comes down to simple logic. “I (would) lose money on every PlayStation I make – how’s that for logic.” Well meeeOW, Mr. Stringer. Sounds like Activisions concerns may have touched a vein. Still, Stringer remains confident that the market will rebound.
Can Sony remain financially stable in our global return from recession? A lot of developers seem to think no, as more publishers join the list clamoring for a price cut. Maybe this is just Stringer’s way of staying quiet until he can drop the PS3 Slim bomb on the world, and that’s when the price would come down. Even with a price cut, though, there’s still the increased cost for console developers on the PS3. If Sony can’t reduce development costs, no amount of logic will work Stringer out of the hole he’s in.
According to Sony CFO Nobuyuki Oneda, the cost of Sony’s Playstation 3 is still 10% higher than the price. In the US that means Sony is losing $40 on every PS3 they sell. It’s certainly no secret that consoles typically follow this pricing pattern on launch, but to still be losing after two and a half years is surprising.
