PS3 Price Drop? Not Really.... Monday, July 09 2007
Yes, I've seen the news about the PS3 "price drop." We've all known it's been coming for quite a while - heck, I even put a stake in the ground way back at the beginning of the year. To quote:
The Playstation 3 will have an effective price drop of at least $100 by Thanksgiving 2007. By effective, I mean that it’s also possible that the price will remain the same, but at least $100 of value will be added to the bundle.
And guess what? It's the latter that happened; the PS3 has remained the same price, but with additional value bundled in. Remember, six months ago the PS3 launched at two price points: $499 (20 GB SKU) and $599 (60 GB SKU). The 20 GB SKU faded away, leaving just a single 60 GB SKU. Today all that's happened is that the existing 60 GB SKU is now $499 and the new 80 GB SKU is $599 (with bundled Motorstorm).
Simply put, a few months ago there were two versions costing $500 and $600. Today there are two versions, costing $500 and $600. You get a bit more bang for your buck, but this isn't going to move the needle significantly on console hardware sales. At the end of the day, the price of entry to play a PS3 game is still $500, just as it was when the console first launched.
Couple of other thoughts to consider. The new 80 GB SKU at $599 doesn't have the backward compatibility hardware in it, so it's not even as full-featured as the launch consoles. And the 80 GB hard drive isn't that big a surprise. Drive prices drop and suppliers find it expensive to keep manufacturing older drives when they can migrate their production to higher-capacity drives at the same price. Sony very likely can't even get 60 GB drives in volume anymore; expect to see the 80 GB drive to become standard in the lower-end SKU when the next, hopefully real, price drop comes.
All-in-all, not much to see here. Sony is still in a tough spot. On the one hand, they desperately need to keep the price high to try and recoup some of their costs. On the other, they need to drop price to sell more units. My guess is we may see a second, "real" price drop as soon as this holiday if the needle doesn't shift much after a few months.

I disagree with you here, Ozy. Yes, *technically* there was a $500 option for the PS3 at the time that it launched, but very few retailers actually ordered any significant amount of the 20GB unit. I'm in the SF area and not a single BestBuy, EB, Toys R Us, or Target that I went to around launch were expecting to receive anything but 60GB units (nor did they stock anything else after the launch and supply quickly caught up to demand).
I think this price cut puts the 60GB PS3 *very* competitively in line with the Xbox 360 Premium given that it has Wi-Fi ($99 add-on for 360) and Blu-Ray built in ($199 add-on for 360). You now have a "complete" package with all the trimmings, for $200 less than it would cost to do the same with the 360.
Now, if only the good exclusive games would materialize...until then, I don't know how much of a boost this price cut really will give them.