Is a PS3 Price Cut in Our Future?

The Internet is abuzz with speculation concerning Sony's future plans with the PS3. More specifically, the public outcry for a major price cut on Sony's PS3 video game system has reached deafening levels. When will the public see a PS3 price cut?

PS3 Price Cut: The Facts
The newest rumors of a PS3 price cut stem from a report on gamesindustry.biz which reports that Sony Corporate CEO Nobuyuki Oneda revealed in a conference call with overseas investors that Sony has been able to reduce the manufacturing costs of the PS3 by 70%. While Sony was unwilling to comment on exact figures, this would put the PS3 manufacturing cost at $240 per system.

PS3 Price Cut: The History
Before jumping to conclusions about a PS3 price cut, however, it is important to consider Sony's history with the system. From the beginning, Sony has touted their 10-year business plan for the system, and has appeared very unwilling to stray from that plan. This unwillingness to compromise has alienated many customers who feel as though Sony is uninterested in customer satisfaction and loyalty.

Whether or not Sony's 10-year plan involves a PS3 price cut in the near future is unclear. What is clearer, however, is that Sony intends to stick to their predetermined business plan, regardless of customer (or potential customers') outcry.

PS3 Price Cut: The Figures
When the PS3 released, its price point was shocking to many gamers. Sony's next generation system released for $799 per system. According to Sony press releases, selling PS3 units at the $799 cost would result in an approximately $200 loss per unit sold for the company.

Later, after some dismal sales numbers, Sony decided to instate their first PS3 price cut, dropping the cost of each unit to $599. This change was not without cost to gamers, however, as Sony removed many popular features from their system to cover their costs. Nevertheless, Sony execs reported that they were still suffering a nearly $200 loss per unit sold.

Details concerning the most recent PS3 price cut are a little less clear, but at no point has Sony been able to say with confidence that they are making a considerable profit on their systems. The current $399 cost has come amidst advancements in the manufacture of the system, to be sure, but the company has yet to recoup their losses.

PS3 Price Cut: The Future
The currently speculated $240 manufacturing cost of the PS3 would result in an approximate $150 profit margin on the system. This amount would only begin to make up for the losses that Sony incurred during the earlier days of the system. A further PS3 price cut would hinder the company's ability to make up for their lost time.

Only Sony knows for sure what their 10-year business plan means for the hopes of a future PS3 price cut. Until Sony execs make an official announcement concerning the matter, all that is available on the Internet is mere speculation. Given their current financial situation, however, a PS3 price cut is more likely that ever.

Gamers might be able to see another significant price cut before Christmas.

For more on this potential price drop, please see:

http://www.informationweek.com/news/personal_tech/TV_theater/showArticle.jhtml?articleID=219000221

http://www.gamesindustry.biz/articles/playstation-3-manufacturing-costs-drop-70-percent