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Finance

3DS price cut puts pressure on Sony

Mon 08 Aug 2011 7:04am GMT / 3:04am EDT / 12:04am PDT
HardwareFinance

Analysts suggest gamer expectations and smartphone competition could cause problems for PlayStation Vita

Sony Computer Entertainment

Sony Computer Entertainment is a Japanese videogame company specialising in a variety of areas in the...

playstation.com

Sony is facing building pressure to cut the price of the unreleased PlayStation Vita handheld.

Bloomberg spoke to a number of analysts and found the Nintendo cuts and competition from Apple both heavily affected the outlook for the machine.

"Gamers are increasingly anticipating Sony to lower prices, especially after the 3DS cut," said Hideki Yasuda, a Tokyo-based analyst at Ace Securities.

"Sony is under major pressure to cut the price of the Vita or risk a major failure."

Gamers are increasingly anticipating Sony to lower prices, especially after the 3DS cut

Hideki Yasuda, Ace Securities

The price of Nintendo's rival handheld, the 3DS, has dropped to as low as $169. US gamers can currently expect to pay $249 to $299 for the device.

The article also pointed to competition from Apple as a possible problem for Sony.

"The market opportunity for specialist devices is shrinking rather than growing," argued Piers Harding-Rolls, a senior IHS analyst.

Koki Shiraishi, an analyst at Daiwa Securities Group also pointed to the iPhone as a potential obstacle. "The environment for portable game players has become more difficult because of smartphones."

But Shiro Mikoshiba, of Nomura Holdings was more positive, stating: "The customers Sony is targeting with its Vita are those willing to spend a lot of money. Thatís a valid strategy even if the volumeís low as long as it can sustain the higher price."

The Vita will go on sale in Japan first, for around 24,980 yen ($317) for the non 3G model, but gamer Yukinobu Takeda pointed to the high cost of the machine.

"PS Vita's quite expensive," Takeda told Bloomberg. "I don't think I'll be one of those people rushing to buy it on the release date. I don't really see a reason to pay that much for another game player. I'm satisfied with my devices."

Last week Kazuo Hirai, president of Sony's Consumer and Products Services group, defended the price of the console.

"We have a very good product at a very affordable price," said Hirai.

"There's no need to lower the price just because somebody else that happens to be in the video game industry decided they were going to."

In July the Sony Corporation reported a net loss of •15.5 billion ($191 million) for the first quarter ended June 30.

13 Comments

Andrew Goodchild Studying development, Train2Game

1,254 420 0.3

Posted:3 years ago

#1
The thing is, I think Sony have been traumatized by the costs of subsidizing the PS3 in its initial years, and obviously are cagey about getting the PS vita pricing right. Chances are the pricing of Vita is still 50-100 usd too pricey for most folks to afford (no matter how technological it is) for mass manufacturing to be a good initial WIN

Posted:3 years ago

#2

Terence Gage Freelance writer

1,288 120 0.1

Posted:3 years ago

#3

Curt Sampson Sofware Developer

596 360 0.6
For consumer opinion, do these analysts have anything beyond an anecdote from one Japanese gamer? I can find ten people here in Japan (including me) for whom at that price it's a day one purchase. Neither factoid really provides any solid indication of consumer perception of the price.

I also notice no mention that the Vita is a much more capable machine than the 3DS, significantly superior in pretty much every respect except the lack of a 3D display (which is a pretty controversial feature, anyway). Do consumers understand this? If a consumer sees the 3DS as only about 60% as capable as a Vita, might they not also feel that it should be priced at 60% what a Vita is as well? Or is the 3DS also too expensive for what you get?

Edited 1 times. Last edit by Curt Sampson on 8th August 2011 3:18pm

Posted:3 years ago

#4

Andrew Goodchild Studying development, Train2Game

1,254 420 0.3
@Curt, you are approaching the question from the angle of "What is contained and is that a fair price for the contents?" which is fair enough, and is they way people with decent jobs and a bit of spare cash, who fit into an early adopter mindset will approuch it. I don't think that the Vita comes out to badly when looked at that way, except that in UK/ Europe we do hate seeing it sold at a higher price than the UK.

Posted:3 years ago

#5

Curt Sampson Sofware Developer

596 360 0.6
Well, I'm not exactly approaching it from that angle as much as asking, is this an angle consumers are taking? One perfectly reasonable possibility is that the Vita will do significantly better than the 3DS because most people willing to spend a hundred quid or more (i.e., serious gamers) will see the Vita as a better value, and those who are not so serious will buy neither, feeling their smartphones will do just fine and cost them nothing.

Looked at on a strictly rational basis, the current price points for the 3DS and Vita seem reasonable for what you get from each. Now, I understand that the public is, more often than not, not rational about these sorts of things. But I don't see any real evidence (at least on the face of it) that the public are going to see the 3DS and the Vita as equivalent. If anything, we know that the 3DS is seen as "just another DS" rather than a large step up from the DSi, and we can see that Sony's certainly promoting the Vita as a big new thing far beyond a PSP. (Whether that will take with the public it's probably hard to say as yet.)

Personally, if I were Sony, I wouldn't drop the price of the Vita, I'd instead push it hard as by far the most advanced portable gaming console in the world. We know that there are millions of people out there willing to spend 250 quid on such a thing, since we've been watching them do just that with the 3DS, without that type of promotion.

Posted:3 years ago

#6

John Blackburne Programmers

41 0 0.0
One competitor not mentioned in the article is Android phones, not least those by Sony Ericsson which include a rather nice Playstation one, recently seen running <a href=http://www.youtube.com/watch?v=bm4vT_4RmAc>Minecraft</a>.

Sony should try to get games like this on the Vita. If they are open to ports like this, as well as from the Xperia Play, iOS and even Android, it could make a big difference. The appeal of iOS is primarily the range and depth of applications for it, at prices set by developers not Apple. So don't cut the price but make the platform completely open, with only limited QA as done by Apple (not the free-for-all of the Android marketplace).

But an even greater opportunity for Sony is to push the Vita along with their other platforms. Develop APIs and services for games that run on Xperia Play and Vita, Vita and PS3 or all three; so games running on one platform can communicate with the same or different games on another, sending messages, gifts, achievements etc. The Vita sits between the PS3 and the Xperia Play in performance and features so should benefit most from this.

Posted:3 years ago

#7

Rick Lopez Illustrator, Graphic Designer

1,269 942 0.7
I myself dont play games on smartphones. i like a dedicated device for gaming. A phone is something I use for things such as work or keepining in touch with family. its the only reason there are so many smartphones and android devices on the street. And while games come for those devices, i usually prefer a dedicated gaming device to play games. PS Vita is a great product, but i still wouldnt purchase it at 250$, to put it bluntly, I simply dont have the money and if I did, it would go to other things, such as bills, food, car, mortgage, etc. I simply have other prioities in life. When the price comes down, because eventually it will, like ALWAYS, I will get one. I think VITA could be used to further develope PSN Network and online distribution and connectivity among gamers, as opposed to keep sponsoring retail and high end gaming expiriences. Home consoles lend themselves more for the high end video game expiriences. I truly think mobile gaming should cater to a more affordable and flexible gaming expirience and slowly build up PSN Network and downloadable distribution. It should cater more to the independent developer. Make games that dont cost so much to do, measure there success to then find the games that may be good business on high end consoles and be potential big budget titles. I think the VITA would benefit from a price cut. More people will pick it up on day one, meaning a higher number of more consoles on the street and higher sales for game developers including SONY. Its more or less how printing companies make money on selling ink and paper. But right now as I choose between 3DS and VITA, my money is on 3DS simply because of the lower cost.

Posted:3 years ago

#8

Andrew Goodchild Studying development, Train2Game

1,254 420 0.3

Posted:3 years ago

#9
except, there isnt anything to play on a 3DS. And i have a 3DS!

Posted:3 years ago

#10

Andrew Goodchild Studying development, Train2Game

1,254 420 0.3
Yeah but the general non games press reading public up won't know that until they've bought one, as long as they see one or two pretty adverts that will be enough. Also, I hope for Nintendo's sake that's not still the case by the time Vita is released. If they go 9 months without getting a few killer games out, then hello obscurity.

Edited 1 times. Last edit by Andrew Goodchild on 8th August 2011 8:29pm

Posted:3 years ago

#11
Unless the PSV can literally double as a phone, I'm not sure the subscription model will work: people will do the math, and see that over 12-24 months it ends up costing a lot more. Will people really pay hundreds of $ more for a 3G/4G connection, rather than just use it over WiFi?

I *was* expecting the PSV to go gang-busters in Japan, but then I expected the 3DS to do well as well. A lot lies on the release/launch title selection. Basically, they need Monster Hunter at (or near) launch - its probably the one title that could make the difference.

Posted:3 years ago

#12

Curt Sampson Sofware Developer

596 360 0.6
Andrew: let me summarize my argument here. We have hard evidence that in the past half year close to 4.5 million people felt that a portable games console significantly less powerful than the Vita with a poor software lineup was worth it at the Vita's price point. We have only anecdotal evidence (basically, people who complain loudly) that this won't work again for the Vita. Lowering the Vita's price point based on only this would be a silly strategy.

Posted:3 years ago

#13

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