The Sony corporation are finding themselves with a large problem in the form of their PlayStation 3 console.
It appears that they still can’t make money based on the consoles current price and as a result, despite intense pressure, are refusing to drop the price further. The PS3 has been at its current retail price for such a long time that it now looks very expensive, even the long-standing argument that you get a ‘free’ Blu-ray player included with the PS3 no longer washes, especially when a stand-alone Blu-ray player can be had for around £120 or less. Sure you get integrated wireless connectivity and free online gaming with the PS3, but not everybody wants these, nor are they essential to the PS3 gaming experience. As well as the perceived lack of value that the PS3 provides, the persistent rumours of a impending price reduction and/or a slim version are sure to keep potential buyers from making a purchase any time soon. Sony therefore has a dilemma. Reduce the price to enable them to keep existing and attract new customers to the Sony brand but loose money in the process, or leave the price alone, loose a minimum amount on each unit but risk loosing customers to main rival Microsoft and their Xbox 360 console. From a financial perspective at least they will sell fewer units with the latter options and therefore loose less money, although at the detriment to long term strategy due to the erosion of the PlayStation user base, something that needs to be avoided in the competitive games console world.
Despite the PS3′s current woes, I think the biggest problem for Sony is yet to come. I think this problem will come from Microsoft in the form of a new Xbox console much sooner than anyone is expecting. Such a product, released as a successor to the Xbox 360, would surely be the worst possible news for Sony. The hype of a new console and the demand that this creates would not only steal buyers away from Sony but it would cement the current generation of Xbox users firmly in the Microsoft camp, especially if full backwards compatibility is included. Judging by the furore over the lack of PS3 backward compatibility it would surely be crazy to overlook this feature. A further knock on effect of a new Xbox would be that developers may, in light of falling hardware (and hence software sales), drop the Sony platform altogether to concentrate on the new Microsoft console. That it is a well-known fact that the PS3 is hard to write software for will only make dropping support for it more likely. This is only my opinion, but a new Microsoft console brought to market in the next 18 months would be perfect timing for Microsoft and could cause irreparable damage to Sony’s gaming division. It could even spell the end for the PlayStation series of gaming machines and this is something that any consumer should not want to see.
Maybe the rumoured Slim PS3 will become a reality and be used as a tool to counteract a possible attack from Microsoft? Sony’s current stance of doing nothing certainly won’t work for much longer. Monopolies are no good for anyone, except the company with the monopoly. Windows operating system anyone?