I'd have to agree with you on your future predictions there Ozy.  It would be Sony's best play for the holiday.  

At first, I was skeptical of why they would drop ALL backwards compatibility as that probably costs nothing to have onboard through software, but then it hit me.  Consumers buying that model will be restricted to PS3 games - a software moving stealth move.  And Sony must desperately want to get people away from PS2 and onto PS3 as people are still buying cheap PS2s in droves.

I'm not all with you on that one...

1) I don't think they'll bring up a new, cheaper Unit.

If I remember correctly, Sony always complained about the nonsense of more than one major SKU. Which is absolutely true - I mean, who'd really miss the 360 Core? Personally I don't know anyone who bought the Core, although there must be some... somewhere...

2) Dropping all backwards-compatibility.

Doubt it. Since they're going the way of the emulation via software it would be stupid to rip out the (assumed small) rest of chips you need to play old PS2 titles. I mean, they're working on the software anyway, so if a small SKU could not use the emu's, no one'd buy it (at this time). After all, the best PS3 games (at this time) are PS2 games.

I do believe that they'll have to - and probably will do *something*.

Probably at the Games Convention in Leipzig or something like that.

So this is still a good deal then? Hardware emulation for backwards compatibility, a 60GB hard drive, and an extra controller and two mediocre games in one package.

If all future SKU's will turn out to be technologically inferior machines, I'd say buy this one while you can.

It's just too bad to have the thing standing in the corner for 18 months, cause I have absolutely no use for a PS3 until FFXIII comes out....

I can see some real possibility in your predictions. This holiday season is very important for Sony. They need to make PS3 affordable to the average consumer while keeping a low production price. To compete, I think Microsoft should have some kind of price cut of their own, but I know you can't really comment on that.

I'm confused as to how you started talking about what Sony are doing in Europe and then ended up just repeating what you've already said about the US packages.

In Europe (or at least in Britain, I think it was the same for the rest of the continent) we didn't get the 20GB model, our back-compat has been *always* been gimped and there was no 'price cut' (which would have actually been a price cut due to the lack of low end model) or announcement of 80GB SKU.

Now, while I'm sure this is going to change before Christmas releasing a package of the console, two games and extra control under one RRP is great news, especially when considering the deals and price cuts you'll be able to find if you shop around a bit.

(I still can't afford it... but it's getting closer at least.)

"A single, $599 SKU would be untenable"

"Would be"?

>If I remember correctly, Sony always complained about the nonsense of more than one major SKU.

Also, just after laughing at Microsoft for said dual SKU thing, at launch Sony had... two SKUs.

just do your job first, disc scratch problems and ring of death problems are the only reasons stopping me from buying a 360. they better make moves to fix these problems now.

If they do introduce a $399 sku, I have to wonder if they would include their blue-ray drive. But I agree, if they don't do something this holiday..it will take them years to recover.

Still, XBox is in the drivers seat as to what happens this holiday. However, I don't think even XBox can rely solely on the strength of their games. If XBox doesn't do another 4 million..I will consider that to be a failure.

Heres a couple of things XBox could do

- Add more storage and a HD-DVD drive to the premium and elite models. Likelyhood: Not very, to much uncertainity in the format war to risk it.

- Add more storage, free gold membership and bundle in games. Likelyhood: Maybe, but I doubt consumers will see its added value the same as Microsoft might.

- Drop price across the board. Likelyhood: Probable, opens the console up to more consumers and keeps intact *one* of its main distinctions from PS3..price. To be honest, I don't trust the sales people at most retail outlets to adequately promote XBox. I think the price differential and the great list of games...to best any sales persons efforts to promote one way or the other.

As far as any price cuts go for XBox, I think it needs to be carefully orchestrated. If it were me, I would immediately cut it by $25. Let that price hold until November. And then run a promotional $75 instant rebate program during the holiday. After the holiday prices would return for a period before dropping another $25.

For Microsoft sake, I hope they are *ahead* of schedule in getting its manufacturing costs down.

"It'll likely remove integrated WiFi, memory card reader, and most controversially, all backward compatibility.  You'll see a new WiFi dongle made available. And finally, this low-end SKU will likely come with a smaller 40 GB hard drive. The low-end price will be set at $399, with the higher-end 80 GB SKU dropping to $499."

It will become an Xbox 360.....

The backwards compatibility on the models without the EE is not gimped, it's actually pretty damn good.  All the games in my collection now run, and without problems... very impressed.  It's certainly a ton better than 360's solution.  My guess is people won't notice the difference.

spam filter on?

@M$: You obviously don't know what Ozy's job is.  

He doesn't come to your work and tell you how to flip burgers.

I'm with you on the price drop/sku issue.

I'm having difficulty on the idea that they're dropping backward compatability. How do you explain that to the mass market exactly? At the point that functionality gets removed, do you start putting a big sticker on the boxes that says "PS3 Games Only"?  Once it's out of the box, how do you know if you'll be able to play that PS2 game over on your friend's PS3?

I can see them removing the hardware as a cost-cutting measure, but I think they're really going to have to do some serious work on software emulation. I don't see them just dropping back compat alltogether, they've got enough bad press as it is.

that's why i put M$ instead of ozy

m0r0n! still, no way i am buying a console that doesn't work lol

I have over 200 Xbox 360 titles and no disc scratches. Even played Rumble Roses XX for 140 hours and no scratches.

***

So why is the Wii eating the 360s lunch? I have one and I just don't know what the appeal is. I've turned it on twice, I think.

The rumour is that a european price cut will be announced at Leipzig. This and apparently some kind of freeview recording facility (which I don't believe).

Personally I think they only need to drop the price of the SKU to 425 in the states and 325 in the uk for the machine to take off. Leaving everything else as is. After all Sony are touting it as a 10 year investment for the consumer and at 425 dollars that's a good investment.

Given they now have such titles as ratchet and clank and heavenly sword coming this year. All that's needed is to make the existing machine hit a price point that people can actually afford.

you must be one of lucky ones. it is normal that a 360 scratches discs.

So you prefer a console with no friggin games, eh?

what console doesn't have games? all this gen consoles in my opinion have at least 10 games that interest me.

Sony is going to have to do something along those lines to keep from getting creamed this season. The 360 has a lot of good games on tap and Halo 3 is even penetrating Japan. I imagine that the Wii will maintain steam considering the price point and casual titles, but, Sony is in for a world of hurt without some dramatic changes.

That might be true, but for the real good PS3 stuff you'll have to wait till somewhen 2k8. For Wii and 360 you are getting all the good stuff now.

Heh, it's funny that all the features Ozy redlines to remove from a hypothetical budget model PS3 are all things that the official MS company line claims are expensive and non-essential, and coincidentally absent from all X360 models. (And yet by some economic miracle, all present and correct on the Wii as well as the PS3. Hmm...)

It's not outside the realms of possibility that Sony might offer another low-end PS3 SKU, but would there be a point? The 80gb model costs less (perhaps significantly less) to manufacture than either of the earlier SKUs. If they can get it under $500 with a compelling bundled game (GTA4) and maybe a movie thrown in, it will do well this Xmas.

I've had a 360 since launch as has a good friend and no scratched discs for either of us. So I wouldn't exactly call it "normal." Does the problem exist? Probably, but its not "normal."

It's not nice living in Europe. Console manufacturers tend to screw you up the ass.

the guy posted above monkey65 is just another lucky user. i don't have scratched discs but all of my friends did. it has been proven that 360 drives lack mechanism that secures disc (kassa). FACT.

The only time I had a scratched disk on my 360 was when the ethernet cable got yanked and it tipped it over. Put a thin scuff on my PGR3 disk but I wouldn't even know it's there, works just like new.

I'm not so sure about there being any new SKUs. Sony can't keep tossing models out there hoping for something to bite and become popular. If they were smart, they'd realize that the $499 price point is working and that if they just keep it there, they'll be fine. Is the damage already done...maybe, but they can't afford this constant game of musical chairs with the different models, at least if they want to actually be successful.

It's nice and all to check out what's going on with the PS3's price and all of the nonsense surrounding that, but I see something disturbing in this:

Sony is making changes to their current approach and it will most likely have a positive impact on the PS3 sales because of it.

Why is this disturbing: What is MS doing in response? E3 was generally a snooze-fest, which showed us little more than the games we've been hearing about and seeing for the last 8-12 months. What's next? Anything? MS seems to be taking a "wait and see" attitude lately and that's exactly how you end up losing a war that could've easily been won had the appropriate steps been taken. Unfortunately, MS is hardly taking any steps.

"Sony is making changes to their current approach and it will most likely have a positive impact on the PS3 sales because of it."

Seeing the player fumbling the ball towards the goal will not have a positive impact with most people, no matter if it is going in the right direction.

Ozy is so good at predicting PS3 price drops maybe he should predict the 360's too!

Re: "Ozy is so good at predicting PS3 price drops maybe he should predict the 360's too!"

Heh - but that would be telling. ;)

In all seriousness, I can't comment on what Microsoft might or might not be planning on topics such as this. You can read more in my "About" link at the top of the page.

What I can do is use what I know and do day-to-day to try and cast some light on what's happening in the industry. Hopefully, over time, you'll find I'm more accurate than not.

NPD #s for June (U.S.)

Nintendo Wii: 381.8K

Microsoft Xbox 360: 198.4K

Sony PlayStation 3: 98.5K

interesting discussion its so 1 sided, what caught my eye was 1 comment claiming the 360 is even penetrating Japan - latest figures showed 360 sales falling below 3000 in Japan - woeful! Still in Japan Famitsu's most wanted games list now shows 4 PS3 titles in the top 5.

No mention of the fact PS3 sales increased 135% across 5 retailers in the US or that the PS3 actually outsold the 360 week ending July 14 in North America.

Another poster claims Sony is "getting creamed", funny but I thought it was MS who put in an ordinary showing at E3. Isn't it also MS who lost Peter Moore? Finally aren't MS the company with the 1billion ++ repair bill.

Nice post ozy - smoke & mirrors - distract gamers from the real issues!

Flec... while I agree with you that there are other issues MS should focus on, unfortunately a lot of what you're saying is also a glut of smoke and mirrors.

"Up 135%" - claims SONY. And while it may or may not be true, what happens when the 60gb systems are gone?

"1 billion dollar bill" - did you see Sony's losses for the quarter? The losses on both sides are pretty close to each other.

"Mediocre E3" - I agree that MS could have shown more, but was Sony's so much better? Not in my opinion.

"More PS3's sold week of 7/14" - We keep weekly #'s in the US now? Or is that more Sony nonsense?

"Lost Peter Moore" - Lost Kutaragi and would probably benefit from losing some of those other idiots.

"Woeful in Japan" - Can't blame them for lack of trying. Either way, nobody's talking about Japan here and I don't see what it has to do with the discussion.

Yeah... that was too easy.

Ozy, do you guys think you can duplicate or better your holiday sales from last year?

I'd personally be very surprised if we couldn't better sales from last year, especially when you take into account the portfolio of titles that'll be available. Here's hoping! :)

I agree about the 360's lineup. I am a little surprised at the Wii's momentum. I really think this must be soccer mom's thinking Nintendo is the brand for kids. When I went to pick up a Wii, that's all I saw... little kids clinging to Mom's.

All of them were getting the console and WiiPlay. Why? Well it comes with an extra Wii remote!

Wii Play is still moving units like mad, and it is an awful title. The one remotely decent possibility was billiards, and it was implemented poorly. It will never be in my console again... BUT... I got an extra remote. That tug to just go ahead and try the games for an extra $10 is similar to the tug of just trying Xbox Live Arcade titles. I didn't even realize I owned (besides demos) over 15 of those games... without really thinking about it.

It's scary that the title that gets consistent gameplay in the Wii is Wii Sports. It's easily the best title I have. I don't have Super Paper Mario or Zelda, and I am probably going to give those a try. I expect one of them to knock Wii Sports off the mantle. I was disappointed in Resident Evil 4. I hadn't realized just how far ahead Bungie is in storytelling and a cohesive FPS experience. RE4 _can_ be fun, except the remote isn't nearly responsive enough or accurate enough. And the only other game I have at this point is Big Brain, which was bought for the g/f... it's something she can play.

So the Wii collects dust and the best feature about it is the Virtual Console. Not good. Still, the soccer moms are convinced by the Nintendo name, the price tag, and the idea that their kids are "off the couch". The marketing is definitely working.

I think after one holiday with the Wii, these same kids are going to be begging for a 360 for Christmas.

I have to say, as an enlightened, and technically savy consumer, Microsoft has used many different channels to spread negative communication re: Sony/PS3.

I believe this fits in that respective category.

Maybe Xbox 360s would be more reliable if their technical director spent more time technically directing, rather than making wagers with people who obviously don't regard them or their credibility very highly.

I'm sorry Andre, but you're not much more than a glorified 360 fanboy who works for MS.