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Sony CEO: No '08 PS3 price cut

Sir Howard Stringer tells Die Welt that his company isn't planning a further console price drop; says Wii "may be a superior business model" in terms of hardware profitability.

In the wake of last week's announcement of a new $499 160GB PlayStation 3, executives at retailer GameStop predicted a $50 price cut for the 80GB model by year's end. However, in an interview published today, Sony Corp CEO Sir Howard Stringer ruled such a move out. Speaking with the German Newspaper Die Welt, the Welsh-born executive--and first non-Japanese chief of Sony--was asked if his company planned to reduce the PS3's price by the holidays. "I think not," the executive stated flatly.

Stringer also had some choice words to say about one of the PS3's rivals, the Wii. He admitted to playing Nintendo's console, which he diplomatically described as offering "a different experience." He also said that he doesn't consider the console as a threat. "The Wii is not succeeding at our expense--it is not hurting us," he explained. According to last month's NPD figures, the Wii was outselling the PS3 in the US by two-to-one, with the Xbox 360 running a close third place.

Stringer continued, "The Wii is a well-made device that has found a new target group. For a while, we held the same target group with the SingStar karaoke game. But perhaps we neglected to pursue that avenue. PlayStation games are rather designed for those who play a lot. Although it's a different strategy, it pays off... The major difference lies in the fact that Nintendo makes money with the hardware alone, which may be a superior business model."

Unfortunately, by his own account, the CEO said that it will be a while until the PlayStation 3 hardware becomes profitable. Although Sony's PS3 manufacturing arm has hit a "production bottleneck" due to demand, Stringer joked that Sony won't make back its hardware-production cost "for as long as I live."

"The traditional business model for the PlayStation envisaged us making a loss with the hardware in the early years until the production costs had decreased to a point that enabled us to break even," explained Stringer to Die Welt. "In the meantime, we earn money with the games. We are currently at the stage in which we need to get a grip on the production costs. That takes time. We are already making more money with the games than we are losing with the hardware."

226 Comments

  • residentzombie2

    Posted Aug 29, 2008 7:25 am PT

    Blu-Ray discs are also more resistant to disc scratches so your disc will not get all scratched up like a CD Autolycus

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  • Sins-of-Mosin

    Posted Aug 29, 2008 7:24 am PT

    They have no reason to lower the price as it's still rated the best blu-ray movie player. Judging by the sales of games on the PS3, it's pretty obvious that most the sales are for movie watching with no regard for gaming.

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  • residentzombie2

    Posted Aug 29, 2008 7:23 am PT

    It is not in the game developers best interest to make a game title exclusive anymore because it limits the total number of units (games) sold. When devs release titles across all platformers, their total sales figure goes up and for the little extra money they may get from the console manufacture to be exclusive is not worth it.

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  • Incubus420

    Posted Aug 29, 2008 7:18 am PT

    I have all Three and i Love my wii and PS3. The Xbox is what you expect it to be nothing more nothing less. Its more like you need to get it. Where only the diehard should get a PS3...Me=Diehard fan

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  • Autolycus

    Posted Aug 29, 2008 7:11 am PT

    In all honesty, for those who havent had a chance to sit down and play all 3, there is a vast difference between all 3. Yes the 360 has more games (including crappy ones) and its your basic console with better graphics and a great online experience.

    The Wii is fun, simple, energetic and anyone can play it, even your parents. They dont do the home entertainment thing and because of that, they can save on system costs and generate a profit on each system sold.

    Then there is PS3, where its Home entertainment value is better then its video game console. I am not saying it doesnt have good video games, but it has a higher value in video playback and server control then it does in video games. the only thing that is different about blu-ray is that it offers more storage space. THATS IT. Nothing more, nothing less. Okay I suppose the read cycle on the audio channel is 16kb/sec faster but that is completely irrelevant.

    My friend has all 3 and he is disappointed that he spent all that money on the PS3. He owns one game (soul caliber 4) and he claims the online games that he's played on it, are a complete mess. There is a VAST difference between XBOX Live and PS3's online system. Unless you have experience in both, you cant really understand. Sony made it more then apparent that they care more about the video playback (blu-ray, unix server to play divx files and just about any other video file from any computer) then video games. If they werent scared about the Wii then six-axis never would've been a part of the PS3 library of things.

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  • residentzombie2

    Posted Aug 29, 2008 6:58 am PT

    How CNET backs the 360 is similar to how the media backs Obama, they say they are being fair journalists and for the most part they are, but you can clearly tell what the media wants you to vote for and it's the little things they do that if you pay attention to will upset you because you will realise these "trusted" sources are pushing their ideas on the viewer/consumer.

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  • residentzombie2

    Posted Aug 29, 2008 6:58 am PT

    How CNET backs the 360 is similar to how the media backs Obama, they say they are being fair journalists and for the most part they are, but you can clearly tell what the media wants you to vote for and it's the little things they do that if you pay attention to will upset you because you will realise these "trusted" sources are pushing their ideas on the viewer/consumer.

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  • Incubus420

    Posted Aug 29, 2008 6:56 am PT

    So this exlpains why they don't shell out the money for Exclusive rights to games that aren't even that good (DMC, FF13). Instead they would rather pay the bare minimum on the production of games and keep Over head at a managable level. I guess this is the only way they can make money for the time being. Little Bigplanet, Home, resistance 2, and Killzone will bring them a boat load of sales and turn the tide on this Next gen war. I like how he enjoys the Wii and understands that it isn't nearly the same experience as the PS3...He said that the wii was a great complimenting system to the PS3 in a previous interview. I agree the Wii is prefect for the girls that come hangout at my apartment, while we play beruite(pong). All in all this is going to be a long war and it looks like Sony is just trying to stay on top of their game.

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  • residentzombie2

    Posted Aug 29, 2008 6:51 am PT

    guys please remember who owns CNET networks, it is Microsoft. Anytime CNET can give a slight edge to XBox they do. Look at games that come out for both XBox 360 and PS3 only the 360 version will have the video review. Enough said.

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  • Autolycus

    Posted Aug 29, 2008 6:51 am PT

    for those who are clueless, the ONLY thing blu-ray has to offer over hd-dvd or dvd9 is more space. THATS IT. it has NOTHING to do with quality, NOTHING to do with making games. just more space....

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  • BRAWLL

    Posted Aug 29, 2008 6:48 am PT

    ok ok Wii and xbox is for cheap loser or poor people PS3 is for the expensive gamers who want the best

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  • BRAWLL

    Posted Aug 29, 2008 6:48 am PT

    ok ok Wii and xbox is for cheap loser or poor people PS3 is for the expensive gamers who want the best

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  • Doolum

    Posted Aug 29, 2008 6:29 am PT

    am not surprised there wont be any price cut.

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  • benboz

    Posted Aug 29, 2008 5:58 am PT

    Are you serious? C'mon Sony, give us a price drop so I am able to get a PS3. If you don't get a price drop then I won't be able to.

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  • BoaMo121

    Posted Aug 29, 2008 5:35 am PT

    @ lamprev and rasterror I wasnt entirely unaware of those things but they kind of slipped my mind I havnt been looking into ps3 specs on the new versions i purchased a 60gig back in 2006. But thanks for the info and valid points to you both.

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  • Czenkus

    Posted Aug 29, 2008 5:32 am PT

    That is too bad Mr. big shot Sony man. Was thinking you would make a huge gain this season too. Hope ya still do, but a price cut would insure it and get more of that install base caught up

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  • ClassicPlayer

    Posted Aug 29, 2008 5:23 am PT

    They'll be deals on PS3 at like X-Mas time anyway, I think currently the PS3 is at a decent price for what it is.

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    • 2 of 3 users agree
  • raverrozza

    Posted Aug 29, 2008 4:42 am PT

    xdeiri how can they remove the blu ray drive when every single game is on bluray...

    and the wii is hardly the honda...hondas are a well honed product. the wiis more like a less powerful vett. a quick blast but primitive and underpowered.

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  • peterp94

    Posted Aug 29, 2008 4:08 am PT

    Lolz. Playstation 3 too expensive to produce, they losing money with each console. The console actuallys need to have a price INCREASE to be profitable.

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  • xdeiri

    Posted Aug 29, 2008 3:47 am PT

    hey Sony remove the blue ray player and you could have even cheaper price , Nintendo is smashing them and yet they still justify their failure with arrogance , and it looks like our boys Jeremy and Hammond havent reached a conclusion about who is faster , the Ferrari or the corvette , I say go Honda = wii , and no I am not James

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  • chiggins28

    Posted Aug 29, 2008 3:28 am PT

    what games?

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  • 1of_the7

    Posted Aug 29, 2008 2:41 am PT

    oki. after puking at that story, all i can say is, im sticking with games on my pc.they are cheaper, and equal, or better quality games, aS WELL AS INFINITE ADAPTABILITY.... ETC. oops. had my caps locked.
    well, thats it. hasta lasagna.

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  • 1of_the7

    Posted Aug 29, 2008 2:33 am PT

    .... i'm gonna .... puke..... BBBBBB-.... BBBBBBBBB..! hhhhhBBBBBBllllleeeecccchhhhh..!

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  • GANGSTASAN

    Posted Aug 29, 2008 2:30 am PT

    Well Sony... You are really trying to push me to buy a Xbox 360 instead of the PS3. It is a shame, I was wanting a PS3, but too much disappointment, nothing to do with the price cuts.

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  • GundamBlue

    Posted Aug 29, 2008 2:30 am PT

    I bought a wii... i also bought a 360...then i bought my ps3...and all i can say is...Darn it why didn't i buy the ps3 first!?!?!

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  • Irve

    Posted Aug 29, 2008 1:45 am PT

    I think he's being economical with the truth ... there will be a price cut on the PS3 for the holiday season as there will be one for the 360. i'm still waiting for that sub £200 ( that's $340 plus tax ) before i even think about getting a PS3
    so it's not hard maths to do that's games and Blu ray that sony are losing sales on ... problem is in the UK the PS3 cost 50% more than i'm willing to pay ...
    BAD SONY !!
    BAD !!!

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  • raverrozza

    Posted Aug 29, 2008 1:40 am PT

    while the wii does affect sony a bit he is kinda right. 90% of wii only owners would never buy a ps3 or 360. most of the real gamers who own a wii who would consider a 360 or ps3 will have already have bought one i imagine. i think its more that the shear amount of business nintendo are getting is not a direct corralation to the amount of business lost by either sony or microsoft.

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  • collingtonuk

    Posted Aug 29, 2008 1:39 am PT

    This highlights the flaw in Sony's plan, they entered the market late to add the blue-ray drive but produced a console that was not the advancement over the 360 that they had hoped, 360 games looked better at the release and still do to this day.

    They were making a loss on the hardware but many consoles were bought as blue-ray drives and not games machines so Sony were never going to make the money back on those machines. Its attachment rate is still terrible because people are still buying them as blue-ray drives.

    It may have been worth it in the long run to Sony if blue-ray can bring in the money but as a games console this one is a failure for Sony.

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  • fairlypriced

    Posted Aug 29, 2008 1:33 am PT

    I think the Wii affects Sony more than they realise. A lot of gamers get the Wii as a 2nd console as it's so affordable and a completely different play experience. Having both consoles and not an unlimited amount of funds there will be times when a gamer will have to choose between a PS3 and a Wii title and on a some occasions the PS3 title will lose out. However, I think the Wii360 combo is more common than WiiPS3. I am currently a WiiPC gamer and still deciding on a 360/PS3. A few months ago it was a no brainer - 360 was the obvious choice. Now with MGS4 looking so great and more and more games getting rated 9+ PS3 is a little more tempting. I already have Blu-ray though and most friends are on 360 and as someone already said with microsoft having the greater user base not many good games are likely to be PS3 exclusive so maybe wii360 is still the way to go.

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  • Dirk13

    Posted Aug 29, 2008 1:12 am PT

    hmmmm good, my MGS limited edition purchase feels all the more sweeter now....

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  • RAVEZero

    Posted Aug 29, 2008 12:49 am PT

    I guess I gotta stick to my Wii360 combo from now on...

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  • lamprey263

    Posted Aug 29, 2008 12:07 am PT

    @BoaMo121 "lamprev what features other than backwards compadibility were removed from ps3 exactly? please elaborate"

    The original 20GB and 60GB PS3s came equipped with both the Emotion Engine and Graphic Synthesiser chips that allowed for full backwards compatibility. To cut the costs of production slightly Sony removed the Emotion Engine chips and instead relied on BC to be achieved in part by a combination of the PS2 Graphic Synthesiser chips and PS3 software emulation. The new PS3s don't have any backwards compatibility because Sony decided to remove the the PS2 Graphic Sythesiser chips to cut costs as well. Other things Sony has done to cut costs is to remove 2 of the 4 USB ports from the PS3, as well as removal of the memory card readers.

    And I only bring this up because these are the things Sony removed from the PS3 to cut the costs to keep it comparable to the X360 prices. Since Sony has nothing left to remove, they can't drop the price any further. This is also relevant since this article talks about how Sony will not be dropping the PS3 price this year, which is why I brought it up in the first place.

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  • DiscGuru101

    Posted Aug 28, 2008 11:30 pm PT

    "Wii is not succeeding at our expense...The major difference lies in the fact that Nintendo makes money...meantime, we earn money with the games..." -Half true.

    Software competes in the open market for consumers limited dollars as a rule. It happens across all media formats. Sony is barely involved with game development compared to Nintendo. PS3 total software shipped, has not yet equaled the software sales of even the Nintendo Game Cube.

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  • CureForLiving

    Posted Aug 28, 2008 11:22 pm PT

    Well I have to agree your average Wii player isn't really the same as your average PS3 or Xbox player, so the Wii isn't really stealing possible customers from either. The did Wii revealed that the casual gaming market is far more profitable then the hardcore gaming market. Sony and Microsoft are still playing catch up to the Wii when it comes to casual gaming...
    Oh and another things, whats with all the car talk in the comments

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  • xophaser

    Posted Aug 28, 2008 11:13 pm PT

    true that

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  • erica1633

    Posted Aug 28, 2008 10:47 pm PT

    rasterror

    No it's the fact that it's so obvious that it will show up on a simple search engine such as google and it's not like this voice from above called google told me the ferrari is better, you actually get the DATA from a real website, look it up.

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  • TheArcade

    Posted Aug 28, 2008 10:25 pm PT

    I wasn't implying Sony did steal by saying that I was just showing balls how absurd his claim is... he talks about how Microsoft stole something well the way I see it Microsoft didn't steal a damn thing and neither did Sony. He was slandering MS for offering gamers more console options because the PS3's userbase isn't high enough to guarantee a greater profit in software sales than Xbox 360's. This is one of the reasons why developers make former Playstation exclusives for Microsofts console.

    I already know why MGS and FF jumped Nintendo's ship you did not have to give a history lesson dolfan. All I'm saying is if the guy swears Microsoft stole Sony's games then Sony stole two quality franchises from Nintendo. Which is completely inaccurate on both accounts, notice the sarcasm?

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  • CorruptGamerGX

    Posted Aug 28, 2008 10:25 pm PT

    Soilworker1234 Posted Aug 29, 2008 4:29 am PT did u notice the "almost" word in there CorruptGamerGX

    Durrr yes. How can the PS3 almost be 3 years old if it hasn't been on the market for even 2 years yet. If he meant it was entering its 3rd year, that would be a different story.

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  • rasterror

    Posted Aug 28, 2008 10:21 pm PT

    Besides for the price or an F430 I could get a Lingenfelter Corvette which is, to be completely honest, faster than a Veyron. And no I don't get my info from from a search engine from a search that will show that a Gee Wiz is faster than a jet. If you want to look up info on a specific topic, do you read a book about that specific topic, or do you believe anything you read? Thought so.

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  • xdeiri

    Posted Aug 28, 2008 10:15 pm PT

    i think Sir Howard Stringer should go horses raising

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  • rasterror

    Posted Aug 28, 2008 10:14 pm PT

    erica1633

    Look at the lap times between the two on the nurburgring. Besides I get their performance data from car magazines, not a search engine.

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  • mushi799

    Posted Aug 28, 2008 10:13 pm PT

    it's still too expensive? For the amount i paid for live up to date, it is actually more than what i had to paid for my ps3.

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  • erica1633

    Posted Aug 28, 2008 10:07 pm PT

    Wait wait ok maybe if the corvette is completely supercharged and all the hookups then maybe a stock ferrari would get it, but any other time yeah right

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  • erica1633

    Posted Aug 28, 2008 10:04 pm PT

    rasterror

    What are you talking about?? just google ferrari f430 vs corvette and you'll see who the winner is. Your argument is completely invalid sorry

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  • cpt_caven

    Posted Aug 28, 2008 9:52 pm PT

    ITt's funny, people see price cuts and say "aww man I bought it when it first came out..." But I got PS3 in the Spring when it came out (60G) and paid round 800 bucks for it (plus game(s)) and really have always seen paying the extra as the chance to have it longer than others, I've always enjoyed my PS3 and even when it died I was happy when I got sent a new one 8 days later in the mail!

    I think that sony has to really push it's heavyhitting games in the coming year by perhaps backing one if it's bigger releases with a pricedropped PS3 so it ends up being the same price as what the PS3 was before the drop (almost as if you get the game free).
    perhaps a god of war 3 pack similar to the PSP's COO with a crimson PS3 or a black one with an airbrushed stencil of Kratos, though I wouldn't want one, lol.

    my 2 cents

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  • osxgp

    Posted Aug 28, 2008 9:13 pm PT

    Still too expensive for the masses. I paid $500 for my 20G model and it was too much then (even though it has full backwards compatibility).

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  • dolfan928 posted Aug 28, 2008 9:07 pm PT (does not meet display criteria. login to show)

    dolfan928

    Posted Aug 28, 2008 9:07 pm PT (hide)

    The problem with the games is that the public is stupid, continues to buy faulty MS products, and therefore close to no developers have moved onto the next generation, i.e. Blu-Ray on PS3 because it's just easier to make games for 360. All multiplatformers are 360 games in a different box, and they're half-hearted ports at best, with most PS3 versions having framerate and control issues. Everyone seems to think the 360's game believe, it would be even better if MS implemented HD-DVD as a games format from the start. If they did you'd have two same cost, same capability, same release timeframe consoles, and MS would be in a distant 3rd right now and out of the console business. Look at Japan. 360 is light years behind PS3 and Wii, and Squeenix isn't even bothering releasing FFXIII there. Those folks didn't buy crap before(Xbox 1), and they don't buy it now.

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  • dolfan928

    Posted Aug 28, 2008 8:56 pm PT

    "CALLING THE PS3 A BETTER CONSOLE IS LIKE SAYING A FORD PINTO IS BETTER THAN A FERRARI."

    Umm no totally backwards analogy pal. A Ferrari is a higher powered, more advanced, better quality, sexier machine. The PS3 is all of those things in comparison to the 360. "Microsoft didn't "steal" anything if you call that stealing then Sony jacked Nintendo for their Metal Gear and Final Fantasy games."

    Sony didn't steal those games. The real Metal Gear 1+2 were actually on MSX, the NES versions were cash grabs by Konami America. Sony got FF because Hironobu Sakaguchi and the FFVII team was not willing to compromise the quality of what became the greatest RPG ever by putting it on an inferior console(what became N64). Get your facts straight.

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