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PS3 needs a price cut to "remain competitive"

RW Baird analyst Colin Sebastian weighs in on Sony's situation

Sony and Kaz Hirai have plenty to think about when it comes to overhauling the company's strategy at all levels. On the gaming front, the company has to prepare for next-gen during a time when it's about to suffer its worst loss in history. It's certainly a fine line to walk.

RW Baird analyst Colin Sebastian recently commented to GamesIndustry International that the first step for Sony ought to be a price cut on its existing PS3, which has been consistently outsold in the US by Microsoft's Xbox 360. This echoes the sentiment of Wedbush analyst Michael Pachter, who earlier this week noted that we're likely to see price drops by E3.

"Sony is in a tough position. In many areas of their business, they are losing share, such as TVs and computers, and their challenges are well known in gaming. The need to invest in a significant upgrade cycle for Orbis/PS4 comes at a awkward time for Sony, but to remain competitive longer term in games, we think there needs to be another price reduction on the PS3, and then be first to market with a next generation console," said Sebastian.

Beyond the pure focus on games, it's clear that Sony will need to do an even better job securing broad entertainment options for those in the gaming demographic. Microsoft, Apple and Google are all going to make that a tough battle.

"The battle for the living room is only going to get more competitive with an Apple television and a bunch of Google/Android powered TVs coming to market - Sony needs to act quickly," warned Sebastian.

The good news is that Sony seems to be aware of this and its PlayStation Network will be a key pillar for the company. This is now a services oriented industry. Xbox Live has been, without a doubt, the biggest bullet in Microsoft's chamber and how Sony chooses to evolve PSN going forward could very well determine the company's fate.

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Latest comments (6)

Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.4 years ago
"and then be first to market with a next generation console"

I think that has become an absolute impossibility at this point.
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Joe Winkler trained retail salesman, Expert4 years ago
The most important department of every tech-based company is the R&D. Even if there are cuts on production the company would do nearly anything to release new gadgets to stay/be in the competition.
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Private Industry 4 years ago
The PS3 is still competitive there is more than only the US market and globally PS3 and 360 are neck to neck.

Isn`t the Wii U coming out this year? Looks impossible for Sony to come out first given nothing is announced yet at all.
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Joe Winkler trained retail salesman, Expert4 years ago
@Werner
They don't count the Wii U as a next-gen console I think. Seeing the Videos this far it is propably an enhanced "current" gen console like the Wii was compared to the Playstation 2/ Xbox at the time it was released.
That's why "being first" is only meant to deal with Microsoft not Nintendo.
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Private Industry 4 years ago
Even if the Wii U would look the same or slightly better than 360 and PS3 it`s still next generation as that was never defined by graphics but simply by the life cycle just like the Wii is part of the current generation even when the games graphics are far away from 360 and PS3. So the Wii U is still in every way next gen :) Than again we take about comments from analysts who have no idea about games :)
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Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.4 years ago
Joe, that's just another facet in the long list of facets that these paid analysts are not to be taken at their word. As Werner noted, the PS3 is still selling better globally than the X360 so again, information of little value. Consoles rarely get a price cut that isn't global.
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