Loving the bet.  Hopefully you come out on top.

I think I'm with N'Gai on this one. Even if the 360 drops in price (as I expect it to) before the big holiday shopping season, I don't see the PS3 going down to $399.

When the 60GB model runs out of stock (or nearly does), probably right around Oct or November, I think Sony will sell just the 80GB model announced. They'll sell it at $499, or possibly some tweener value like $449.

Don't get me wrong, they desperately need to drop the price to $399. In fact, $399 is a price that you'll "plateau" at in terms of sales much like the 360 has, and we all know that historically 80% of the sales happen at $199 and below. $399 gives them a chance of hanging in there, but they need to catch up, and that means they need to be $349 or $299. But that ain't gonna happen for awhile.

Sony's in an awkward position of needing to turn the whole company's fortunes around, and their investors don't want to wait four years for it to happen. The Playstation business can't afford to sell millions of systems at a $100+ loss, and yet they can't afford to charge a much higher price for a system that doesn't have visibly more sophisticated games than the 360.

Either way, there's a good dinner and conversation to be had so I'm not too worried. :)

It really all depends on what Sony's goal is for this generation. If their goal is to win the generation, they have no choice but to cut prices, and cut them hard, and take the financial hit.

On the other hand, if their goal is for the PS3 business to essentially break even, and drive BluRay acceptance, they won't. One thing is interesting. Nintendo posted their numbers this week for the quarter, and their sales projections are astounding. As I read them, they're predicting 335k/week sales for the rest of the fiscal year. Even counting the huge sales they'll have at Christmas, I don't see how they could possibly get there without a price cut.

So lets say that, going into Christmas, you see:

Wii - $199

360 pro - $299

PS3 - $499

The PS3 isn't going to sell squat. Even if they come up with an SKU at Ozy's suggested $399, they're going to be double the price of the leader. In order to have any chance of not being in last for this gen, they have to get the price down under $300 I think.

What?  No dreadlocks?

I wonder how much blue ray plays a part in pricing too. If they dropped the price of a blue ray PS3 too much it would probably take away a lot from sales of stand alone blue ray players. Isn't the current going rate for a blue ray player $499 right now??? They would almost have to come down in price for both the PS3 and their line of blue ray players.

Does anyone else see a problem? How can Sony ever get the price down that low with its built-in blue-ray drive. I would imagine that would squeeze quite a few blue-ray CE manufacturers. I'm pretty darn sure a retail salesperson will redirect customers to PS3 if they can't get them to buy into a more expensive blue-ray standalone player.

Oh, one more thing...there is something very comforting when you hear Microsoft basically say that they are counting on Sony to release a $399 PS3 sku.  It makes me think they have planned for that possibility.

spam filter on?

I think you're going down on this one Ozy.

Sony will continue their "strategy" of iterating the hardware and keeping the price the same.  Getting a big press boost every time they put the last model on clearance at $499.

Apparently, I'm the only one who remembers that there was a $499 PS3 at launch...

I am with you J. There was a $499 PS3 at launch that was discontinued. It didn't work then, why should it now.

If MS will drop their premium to $299 and incorporate the new 'Falcon' chipset to deal with the reliability issues, Sony will be caught with their pants down this holiday season. The Wii will prove to be a fad. (My Wii hasn't been played since 6/9.) MS needs to invoke a killer instinct and flex its muscle with their market position. Therefore, more Sony exclusives will jump ship with the massive hardware sales and MS's momentum will be unstoppable. Go for the knockout MS, don't throw a $50 price cut down.

@ J. Goodwin

I remember...

This bet has definitely picked up some legs on the gaming blogs, but they all share the same title of MS vs. N'Gai Croal which seems a little bit misleading, but that's journalists for you.

"But so be it - that's what one gets when distracted by his flowing locks."

Did you make this bet in person, or was he rubbing his hair up against the phone?

"this time, we won't even be able to blame intoxicants, seeing as we accepted during business hours."

Ah, you professionals and your mandatory 9-to-5 sobriety. To ape a line from Goats, how quaint- it's like I'm playing against the Pope.

why not just fix the RoD and dvd scratch problem m$

Just wondering if you saw this article http://www.totalvideogames.com/news/Microsoft_Predicts_$399_PS3_11891_3307_0.htm

Sony creates a 40gb sku at $399. great.

Microsoft still selling flawed and broken 360's almost 2 years after launch.

yeah if you want to take potshots at someone then focus on your own company and their crappy hardware.

then fix XBL's crappy p2p service and give us something worth paying a stupid price for. if I wanted to hear the same boring ass PS3 ramblings I'd go to gamespot.

How long did it take at the Microsoft weekly FUD meeting to come up with this nonsense?

Any idiot can see what you are upto here.

You tell everyone you think there will be a $399 PS3 to stall the mass uptake of the PS3 at a time when a very strong game lineup is about to hit. (and a price drop in the US/pack increase in the EU). Their hope is people will believe this, and hold out on a PS3 purchase, for a price drop than may be another 6+ months away.

All very underhand tactics from Microsoft, but no change there then.  Is it anti-competitive, i'm sot sure, but I do hope Microsoft get nailed over all this FUD they are creating about the PS3.

However I can underdstand why, at a time when 360 sales have stalled, execs are dumping stock or being fired, failure rates are on the rise, and the 360 name is mud in the industry.

This was a funny one:

"ales of the PS3 have risen but we booked losses due to our strategic decision to price it below the (production) cost. Actually, because the number of units sold was not as high as we hoped, the loss was better than our original expectation."

http://blog.wired.com/games/2007/07/sony-fewer-ps3s.html