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Has Sony Made a Mistake? |

I ask this because I’m a little surprised that there will be no option to buy the 20GB PS3 in Europe. Correct me if I’m wrong, but isn’t the whole point of having the two SKUs, being the choice to choose which one we can afford or which best suits our needs? Sony have effectively removed that choice and they could be punished for their possible error of judgement.

If the 60GB PS3 sells out in most of Europe, then they will feel vindicated in only making the 60GB PS3 initially available. However, if it isn’t a major sell out initially then it can only be blamed on one thing: the price. Having the 20GB PS3 available makes for more pleasant reading (and comparisons) to Joe Public. They can compare the 20GB 360 with the 20GB PS3 and most will see that the latter outperforms and out-functions the former, and with a favourable price point to boot.

The PS3 is selling well in North America and Japan despite scare mongers and misleading headlines, but it possibly isn’t doing aswell as it could be. This is partly being blamed on a lack of AAA titles at the present time. The same can’t be said of the EU launch though, as it’s one of the finest launch lineups that will ever grace these shores.

Causes and effects

So what will be the cause if the PS3 is still not selling out and all units aren’t snapped up at launch? It won’t be the lack of games that’s for sure. It will be the price and the lack of a cheaper system for us to choose if we vote with our wallets and say £425 is just too much. Add on the cost of 2 or 3 games, an HDMI/Component cable (for HDTV owners) and an extra controller, and the price soon hovers towards the £600 mark.

To counter the price argument, I will play the launch card. Launch periods are a special time in a console’s life and most people who do buy at launch will either have been saving money for the purpose to get the console at launch (me), or are hardcore technophiles who just have to have the latest shiny equipment and (possibly) have disposable incomes (not me 🙁 ).

Ace in the hole

Sony does have a back up card to play if the 60GB PS3 doesn’t sell as well as they are hoping. They can release the 20GB PS3 at a cheaper price of around £350, making it almost like a price drop to would-be owners put off by the psychological barrier of a £400+ console. Or they can drop the price of the 60GB PS3, which isn’t going to happen anytime soon. Heck, they could even throw in a ‘free’ BD like they did with the North American launch to slightly soften the blow, and get BD into people’s homes from the off.

Sony has said that the demand isn’t there for the 20GB PS3 in Europe but I disagree. The ‘core’ PS3 is not like the ‘core’ 360 which was inferior to the ‘premium’ 360, due to the omission of the HDD. The 20GB PS3 is only missing WiFi and the Memory Stick/card readers from the 60GB PS3, and these aren’t massive omissions like a HDD, these won’t affect how the PS3 runs games or affect how it runs out of the box.

Sony has gambled with their decision to delay, possibly permanently, the 20GB PS3’s arrival to these shores but only time will tell whether they have played their Ace from the off, or whether it’s still hidden up their sleeve, ready to be played when the time is right.

Oh, and I’m planning on getting the 60GB PS3 but it’s not as if I have a choice between the two now is it.

  • You say “Sony has said that the demand isn’t there for the 20GB PS3 but I disagree.” How do you disagree with raw numbers? The 20GB just doesn’t sell as well.

  • Or is it that the 20gb technically costs Sony more to sell at that price point than the 60gb model, since the difference in component costs are minimal (according to some reports)? Still, it’s silly to remove the 20gb option, I agree.

  • It’s based on what retailers have told them yet I wasn’t asked and neither was anybody that I know.

    You’re also not taking into consideration that Europe is a completely different market to North America and Japan.

    Why have two SKUs for us to choose between then take away the cheaper one based on demand in other regions and what retailers say?

    There’s a lot of people that want a PS3 but simply can’t afford the 60GB asking price, yet they would have bought the 20GB PS3 with little hesitation.

  • liar

    I think it’s the correct decision. The 20GB units in Canada are the last to be sold. The 60GB disappear immediately…still the case as we head into February. The 60GB is a much better value and it tells me people are willing to pay for the *more expensive* PS3 version. I’ll repeat that…people are buying the *more* expensive version and the least expensive version as a last resort. The built-in wi-fi is the main reason I think. That is VERY GOOD news for Sony. Very good news.

    Microsoft has tried to make this about cost vs value conversation and the opposite argument when it comes to MS on-line vs Sony on-line. It’s ok to pay extra for MS on-line access but you shouldn’t pay extra for the PS3 console. That’s a pile of crap..can’t have it both ways MS. The PS3 console cost is a bit more but the value is a lot higher.

    I think Sony have learned from the initial launch that 60GB is where it’s at…not 20GB. The playstation brand is very strong and the PS3 is such a better value. People are skipping over the 20GB and going to the 60GB. That’s the case in Canada for sure.

    There were a few analysts in the minority that said they should have had only one SKU … I think they are turning out to be right and that is why it’s 60GB only for Europe – I don’t think you will see a demand for 20GB.

    I think Sony is correct the demand is for the 60GB. Again VERY GOOD news.

  • I agree with Gary, they should be pushing the 20Gb version imo, yeh they make a bigger loss, but it’s more sales, and that’s apparently more important atm. I think the 20Gb at £350 would give people ALOT less to complain about, if they had any intelligence that is.

  • User

    According to iSupply: Sony is loosing more money on the 20GB than the 60BG version.

    But to answer your question, Yes, sony has made a mistake: take a look at this:

  • Tom

    I agree with Gary. With the number of units that Sony intends to launch with being very high and the price being very high, it’s unlikely there will be a shortage.

    You know what will happen though. In a few months time Sony will unveil the 20GB package for Europe advertised as some kind of “price break through”; something similar happened with the PSP Base Pack.

  • Pc

    I would rather have the 60gb version anyways. I always want the best and the 60gb PS3 is way better than the premium 360, therfore i would have no problem paying for the 60bg PS3. I’m one of those guys that loves electronics and if possible, i try to get the best anytime i can, but that’s just me. 🙂

  • Keith Andrew

    It’s not fair to say that the PS3 is “selling well” at the moment. Considering 2 million units have now been shipped worldwide, I think Sony would have intended to have sold more than around 1.5 million at this stage (according to recent estimates.) Indeed, PS3 sales are dropping week on week – and not due to a lack of supply. The latest Media Create figures claim Sony sold just 21,000 PS3s in the last week, compared to over 80,000 Wiis.

    It’s all starting to look a bit 3DO. Too expensive, and no real killer-apps.

  • The 360 and Wii also had drops in sales over the same period so it’s not just the PS3 in that regard.

  • hotcarl

    I believe that this is a good course of action for Sony (and one that might have helped the NA launch). The thought (I’m assuming) is to avoid disappointment from early adopters. All launch PS3’s will be sold and they don’t want a consumer to buy the 20GB because it was the only one they could get their hands on. They’d rather take care of launching the console, and then introducing the “choice” when consumer’s can “choose” based on what’s better for them rather than what’s available.

  • Keith: Yes it is fair to say that the PS3 is “selling well”. Why? Because it IS! The holidays are over and sales are on the decline for all game systems, not just the PS3. Compared to the PSOne, PS3, and 360, the PS3 is actually selling better than they were at the same points in their life cycles. I’d say that’s pretty good.

    The Wii just happens to be doing so darn well, that in comparison the PS3 doesn’t look so good. But that’s not to say the PS3 is doing poorly, because it’s not.

  • Sporty

    From everything I’ve read the 20gb model is coming later to PAL regions. I understand how some are upset over not having a cheaper version. But honstly if your going to dump that much money into a console, why not get the top model.

    I think the reason for one sku at launch is to ramp up the supply as fast as possible. Providing two skus with a lopsided demand on one just makes some people settle for the lower one when they wanted the higher one. Also lowers supply overall. They can crank out 60GBs untill demand is met then release the 20GB and avoid the problems they had here and JP launches

  • First of all… The us and jap sales are not dropping “week on week”. Last week was the first week, where sales were lower than the week before… hence the sales have only risen up until now!

    Secondly. Yes, the price is a bit hard to swallow, but it is the same with the iPod in some ways. There are MUCH cheaper MP3 players around, yet they dont sell ANYWHERE near as good as Apples accessory! Why is that? There are many things that factor into this. Quality, name of brand (Apple is renowned for high quality hardware), ease of use, compatibility and so forth… I think, this is the same with the PS3. It sells well, although there are competitors that offer “the same” (not THE same, but nearly equal). The PS3 has many advantages over the competition, which negates the price differential.

    Thirdly. The iSupply numbers are (imho) very off. Some things just seem wrong. First of all, Sony produces all of the Chips inside the PS3 itself (except the HDMI chip, which costs less than $1 afaik), which means, theres no “overhead” for chip producers like TMSC. That means, the Cell and the RSX are overpriced in this sheet. Comparing it to the 360s numbers from iSupply (MS tapes out at TMSC) the XeCPU and GPU should be more expensive than the PS3s chips. And $200 for the BD ROM drive also are a bit high. I’d rather think it is half that, because the only major difference here would be the diode, and that does not cost $150 per unit. The rest is nearly the same as in any optical drive, manufactured over the past 20 years.

    Forth. I think, Sony asked the retailers what the preorders were… And I think more than 95% of these were 60GB versions, so Sony would produces units not to be sold in a timely manner. Yes, for some people unlucky enough to not have 100€ in loose change, it sucks, but Sony thinks, it doesnt need to cater that demand. And I dont think, thats too wrong. First of all, they make more money and secondly, they dont need to have 2 SKUs in retail, which saves space (also no problems in shipping etc…). Wifi is pretty widespread in Germany as of now (took a huge leap the last year… PSP wardriving is fun :D) and so the Wifi in the PS3 is needed.

    And to put into contrast. Germanys sales are on an alltime low (lowest sales in January since 1995 or so) atm. Ok, our VAT was raised (19% now, but strangely no PS3 price increase, although we now have higher VATs than Britain) but only on non food (and also not on reading stuff and so on) articles. January and February always are the month with the lowest overall sales, virtually worldwide (dunno about non christian countries).

    And “declining sales”. The PS3 up till now sold more units than the 360 in the same time, although it had a bigger launch allocation and despite being “so much more expensive and it doesnt have killer games, is proprietary, is less powerful, Sony shoves BD ROM up our behinds…”

    So, I think I am done for now ^^

  • I read a number of accounts where people were settling for 20GB because that is all that was out there. I don’t have concrete numbers, but I do feel that the inclusion of wifi and the card readers really does help the 60GB unit and I think it would sell about 5:1 over the 20GB if placed side by side.

    I believe it is easier for Sony to put all production behind one unit at this time and later add the 20GB for those that want a better price point. I don’t think Europe wants to feel what we did here in the states with short supplies. Would you guys rather have half a million total 60GB and 20GB units or one million 60giggers. I think that question should answer itself.

  • We will see at launch won’t we, If I walk in to store and can’t get a PS3 within 7 days of it’s release then Sony were right. If I walk in to a store and can get a PS3 without pre-ordering, then it will prove that there is a demand for a lower priced PS3.

    The WiFi means nothing to me as my wireless router is right next to where my PS3 will go, so I can easily connect it using Ethernet. And I won’t use the card readers at all so all I’ll be getting for the extra price is a bigger hard drive.

    Four of my friends have all said they would get a PS3 at launch if the 20GB was available, so they are going to wait until a price drop or until the 20GB arrives. Four sales of the 20GB PS3 beats one sale of the 60GB PS3.

    Consider if these 4 people bought the 20GB PS3, then add on a couple of games, extra controller etc, and Sony would clearly gain by having these four on board the PS3 train, rather than passing them by on the sidelines. If they haven’t got a PS3 then they can’t buy games, peripherals and BD movies.

    I don’t hold much water with market research or what retailers say. I believe there is a demand for both SKUs and the people I know personally, prove this.

    It’s also a little annoying that Sony decided to go with two SKUs in the first place then decide to remove the option of the cheaper SKU.