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Pachter expects $499 price to remain, even when 60GB PS3s do not

Will they? Won't they? This is worse than Ross and Rachel. Ah, the 90s. Simpler times. Since Thursday, we've been questioning whether the 80GB PS3 will drop to $499 once the 60GB version sells out. We're fairly comfortable with our prediction that it will and Michael Pachter, of Wedbush Morgan, agrees.

Pachter states that "the Sony entry level price of $499 is here to stay" and that "there are presently 2 – 3 million 60Gb PS3s produced and not yet sold." This number constitutes up 75% of PS3s in the hands of consumers right now, so the idea of that many selling out before the end of the month, as Reeves suggested, is ridiculous. Pachter's reasoning for why he expects the 80GB model to drop in price is similar to most people's. The 80GB PS3 should cost Sony as much, if not less, to produce than the 60GB model thanks to removal of the Emotion Engine (which, at this point, is the PS3's equivalent of the appendix). Not to mention that Motorstorm is included in the 80GB box, so removing the game will allow the bundle to drop in price by at least $50.

Pachter ends his report by saying that he expects "the $499 price point to be maintained until early next year, when the 80Gb model will likely be cut again to $399." We're not so sure about this ourselves, but we'd definitely like to see it happen.

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Reader Comments

(Page 1)

1. Who in the hell is Pacther?

Posted at 3:13PM on Jul 16th 2007 by Stellarpimp

2. I always knew that is what Sony was doing... If everyone thinks hard enough it really is the ONLY business strategy that makes sense. I just hate how the media loves to distort and make Sony look bad with every chance they get. IT IS REALLY GETTING ANNOYING.

Posted at 3:17PM on Jul 16th 2007 by never$$hort

3. My only reaction is; they better do it that way. If Sony has proven anything it's that what they should do, what would make sense to do and what they will do are not always the same things.
I think they'll do this, but I wouldn't put money on it.

Posted at 3:25PM on Jul 16th 2007 by mccomber

4. Sony is confusing people with their products. If I hadn't allready gotten a PS3 I would be thinking this.

-Why do the keep switching models, is there something wrong with them?
-Should I wait for another pricecut?
-Which model should I get?
-Will it become obsolete?

Stop confusing consumers and develop a model that will sell for 10 years.

Posted at 3:45PM on Jul 16th 2007 by Andy

5. Makes sense to me.

They always need a console-only sku on the market.. after the 60gb are gone, that would be the non-bundle 80gb. Can't sell it for much more than the $500 of the current stand-alone 60gb.. so the standalone 80gb will be $500.

They may be other bundles to move units.. like a Heavenly Sword or LBP bundle.

Posted at 3:51PM on Jul 16th 2007 by Peter J

6. word of this has gotten around so fast...how will they sell out of 60gb models if everybody knows the 80gb will be the same price immediately after those are gone. its a catch 22.

Posted at 3:55PM on Jul 16th 2007 by Justin

7. "MARKETING" lets sell a 20 and a 60gig PS3...... Um no lets sell just the 60gig, one Sku is better you know...... um no on second thought lets do a 60gig and a 80gig version.....No No that wont work we will stick with just the 80gig for now... what the hell is going on over at Sony

Posted at 4:02PM on Jul 16th 2007 by BigBoy

8. Everyone knows you can replace and upgrade the hard drive in the PS3 right?? It doesn't seem like it because everyone continues to b**** about the new 80gig model replacing the 60... Seriously who cares!??! My Ps3 is 250gig which blows away both models, replace the HD and get over it!!!

Posted at 4:06PM on Jul 16th 2007 by never$$hort

9. @ never$$hort...mine is 160GB...

How much did you pay for your 250?

Posted at 4:14PM on Jul 16th 2007 by Justin

10. @Justin: I think I paid just under $140-150

Posted at 4:20PM on Jul 16th 2007 by never$$hort

11. He also said microsoft would do a price cut this e3, and that the wii wouldn't sell very well. lol

Posted at 4:22PM on Jul 16th 2007 by JeremyK

12. 250GB?

Do you really need that much?

I have trouble filling up a 30 GB ipod.

Posted at 4:25PM on Jul 16th 2007 by Andy

13. never$$hort is right. Sony is being stupid since there is no need to constantly offer new machines with different hard drive capacities since one of the benefits of the PS3 is that you can pop in whatever 2.5" hard drive you want. They should just sell one version (60GB is a decent baseline) and let people upgrade whenever it's convenient.

Posted at 4:36PM on Jul 16th 2007 by JimyD

14. Mccomber, I'd put money on it. Either the 80GB drops or a new budget SKU makes it's debut at $399.

Andy, Apple introduces new iPods all the time. Hasn't deterred the general public from eating them up. There's a new Toyota Camry every year, but those still sell. Introducing a slightly improved model of an existing product is not some crazy Sony ploy; it's common business practice. Sell your new SKU at the same old price (while production costs may actually be lower due to a now streamlined production line / supply chain) while phasing out the old SKU at a discounted price. It's how Apple maintains their profit margins and price points while selling essentially the same crap product every generation.

And Jeremy, Pachter knows what he's talking about. He's right more often than not, and the Microsoft price drop is looking imminent. He's also always maintained that the Wii would be strong out the gate, but the sales wouldn't be sustainable. What'll be most interesting is seeing how his long-term prediction for the end of this generation being 38%-32%-30% for PS3-360-Wii will pan out.

Posted at 4:48PM on Jul 16th 2007 by upz

15. I think it is safe to say that there will always be a $499(and eventually less) PS3 from here on out. Sony has made some questionable decisions but they have seen the negative reaction they've recived and I believe they have dialed in how they need to act. The real question is do I go grab a ps3 with an emotion chip for $499 or do I wait till the 80 gig bundle is dropped to $499 with (hopefully) rumble and Uncharted is out?

Posted at 5:02PM on Jul 16th 2007 by BlackBeltJones

16. BlackBelt - take a look at the Euro BC list and decide. Many games work fine with software emulation, but several big hitters don't. Can't remember off the top of my head, but I remember checking the FF, RE, GoW and MGS series and being surprised how many of them wouldn't work without the Emotion chip.

Posted at 5:39PM on Jul 16th 2007 by upz

17. Sell the PS3 with no Hard Drive for $400.

Posted at 8:17PM on Jul 16th 2007 by langx

18. @17 That would be hands down the worst thing Sony could ever do. That would force game developers to make games that don't utilize the hard drive. Which would drastically increase load times... None of us want that. I'm sure Sony doesn't want that either.

Posted at 3:54AM on Jul 17th 2007 by Stellarpimp

19. What i would think Sony should have done is stick with the 20GB model, drop the price and constantly tell the consumer to buy bigger hard drives if they want more space! Hey even give tips and explanations ("HOW to do GUIDE) on completing the task, but i forget how the public can sometimes be lazy. This as their trusted electronics store to add the hard drive for like 50 bucks

Posted at 8:56PM on Jul 31st 2007 by Makiyura

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