Jeff Gerstmann Just Said Sony Decided on $399 Today

The XBone was always planned to be priced higher than the PS4. MS strategy with Kinect and an all encompassing media box is what they are trying to communicate to the market as being better value.

"Check us out. We've not only got all the best and beautiful next gen games, but our online experience, UI, apps, Kinect functionality and TV features make us the superior choice."

Kinect was always going to part of the main focus and it was ALWAYS going to be bundled with every SKU. The original Kinect was an experiment, laying the groundwork for the real deal coming next gen. MS is betting on the mandatory Kinect integration to be a distinguishing feature that will steer the market to them, away from the PS4. The Twitch.TV exclusivity is huge too.

Sony took a different approach. Focusing on games and a $400 pp, they invested in the components that would give them the best bang for their buck and garner the most support from developers. PSeye and their other multimedia functionality has received considerably less attention, though certainly not being left ignored.
 
I don't buy this. No way a huge company makes these types of decisions just before one of the biggest briefings of the year.
 
Alpende said:
I don't buy this. No way a huge company makes these types of decisions just before one of the biggest briefings of the year.
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Exactly.

What I can imagine though is that Sony had a number of possible price points on the table which they could shuffle at their leisure in response to Microsoft, and know exactly what their numbers would be if they had to go with any number of price points.

£349 will have been discussed and calculated at length for weeks and months, but it was probably just one of several options they had going into today and chose to play it in response to Microsoft. For example, there were also probably pricing options which were higher on the cost of the hardware but included free online play.

To be honest, Sony's entire strategy for the next-gen seems to have been one long bait and switch of Microsoft and they haven't been able to keep up. Certainly since February, but possibly even longer if you consider all the rumours about PS4 and no used games.
 
I'd be surprised if a company in Sony's financial position just up and decided to lose more money on a console within a few hours because they decided to one up a competitor is most likely MAKING more money on each console sold.

But whatever makes for a better story.
 
$100 dollars less is a big deal. I don't understand it given Sony having better hardware.
$399 must be very close to being at cost.

I think they may have decide to make PS+ mandatory for online play as a result, to offset the cost of the system. I don't think most people would mind, given that things like Netflix don't require it (and which apparently you need Xbox Live for if you choose to go with an Xbone), and there are free games tossed in with the PS+ subscription.

Most satisfying conference I have ever watched.
 
MarzipaNMOS said:
uh... as if a giant multibillion dollar company was deciding major details about its platform the day of a major press conference? I'm calling BS on his claim
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Agreed. Gerstmann spouting BS? I'm shocked.
 
Gerstmanns been full of shit recently. He may have experience in the business but it seems like he's been completely blind to the reality of the situation that was unfolding.
 
I'm loling at people thinking that powerpoint slides are difficult to make.

Those slides were deliberately plain. They wanted the message and only the message on screen.


The templates for the other stuff would take less than 5 mins to get hold of even if it was late and filling the templates my 10 y/o daughter would find no challenge and she'd complain of lack of challenge.
 
Eh, kinda unfair to pin any credibility on him, when it is 3rd hand information. Also, he did mention it on a very late night stream which was recorded after most of their recording equipment got jacked.
 
Interesting if true.

I'm in marketing for a giant multimillion dollar company and absolutely these types of decisions can happen. When you're dealing with competition and policies and perceived 'bad news', if given enough time to plan for contingencies it is incredible how quickly things can change.
 
Bumhead said:
Exactly.

What I can imagine though is that Sony had a number of possible price points on the table which they could shuffle at their leisure in response to Microsoft, and know exactly what their numbers would be if they had to go with any number of price points.

£349 will have been discussed and calculated at length for weeks and months, but it was probably just one of several options they had going into today and chose to play it in response to Microsoft. For example, there were also probably pricing options which were higher on the cost of the hardware but included free online play.

To be honest, Sony's entire strategy for the next-gen seems to have been one long bait and switch of Microsoft and they haven't been able to keep up. Certainly since February, but possibly even longer if you consider all the rumours about PS4 and no used games.
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This makes the most sense. Everything else seems fairly short sighted for a company this large. Wouldn't happen
 
Epicine said:
This makes the most sense. Everything else seems fairly short sighted for a company this large. Wouldn't happen
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That's how big decisions are made; work out number of options, spend enough time to make sure You understand all the consequences, pros, cons, profit impact and so on, and when time comes You don't hesitate but simply pick one which makes most sense in given conditions.

So while option generation took some time, months even to make sure they know BOM, supply constraints etc, very decision on setting the price could indeed be made in reaction to MS conf announcements.
 
I believe this and it only makes sense. Going 'second' was a brilliant strategy and gave them time to think things over and ultimately go for Microsoft's jugular with the $400 price point.

GoddyofAus said:
Now that I'm thinking about it, they have to be producing this thing at a loss, surely.
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That's a given and I bet it's a big loss for each unit, but with the market share they just gained (lol who's buying the Xbone now?) they should make a profit fairly soon.
 
Complete load of shit.

They would have had it defined months ago. Do you know how much market testing they would do, and how many approvals they would need, and to have manufacturing deals in place well before announcement to have shipping stock..

Jesus. Such a dumb comment.
 
PhatSaqs said:
Pretty telling that they showed the camera very prominently during the unveil but its nowhere to be seen in the priced console. Im betting they had multiple options based on what MS did.
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Yep. Typically these guys have 2 (sometimes 3) different "versions" of their conferences ready to go. "If...then..." preparations play a big role at major conferences.
 
Seance said:
Fucking. Bullshit.

There's not even a minute chance that that could be true. You think Sony watched the MS conference and threw together their price slide accordingly? This shit is planned to the T and set months, if not years, back.
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they could have had a few setups planned in advance, based on what MS announced - and then just chose the relevant one after the MS conference.
 
snoopen said:
Complete load of shit.

They would have had it defined months ago. Do you know how much market testing they would do, and how many approvals they would need, and to have manufacturing deals in place well before announcement to have shipping stock..

Jesus. Such a dumb comment.
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He never said they decided on the price today, he said they put the slide in today, I think that's totally believable, they couldn't not announce the price after MS did, but if MS hadn't then they surely would have punted that discussion as well.
 
The same thought passed through my head when I saw the powerpoint slide that looked like it had been thrown together in like 5 minutes, just black text on a plain white background with a product shot just sitting next to it.
 
I think they were not going to reveal it at all, and assumed Microsoft were not planning to either. Then when they seen the $499 it was too good an opportunity to miss.
 
Sony deciding to announce the price today in response to Microsoft's conference sounds incredibly plausible. I have my doubts they would decide the price in such a short space of time.

I guess my announcing their price, MS tried to force Sony's hand... not the best idea.
 
GoddyofAus said:
Now that I'm thinking about it, they have to be producing this thing at a loss, surely.
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Zomgbbqftw did a cost analysis in this thread that suggests a wholesale cost in the 450-490 range assuming they bundle the PSeye (a big chunk of the variability is if they manufacture in China or Japan).

Now Sony might be beating wholesale prices on some of this stuff due to the sheer scale they're ordering some of it at (for example, the larger GDDR5 chips will likely have their R&D all but subsidized by Sony's first PS4 roll out), and it doesn't look like they're going to go with the PSeye in every box, so they could realistically be in the low 400's ($420-$430?) which means they'd break even once someone has bought two games or peripherals, and be ahead if the game is a Sony first party title.

Also, this would suggest that they're profitable on European consoles from day one, since the exchange rate puts that over $500 USD (while MS' is around $660).

What I'd wonder about if Gerstmann's rumor is true would be whether the price went up or down. I could see them having decided to come in lower than Xbox One and therefore were ready to announce a $349-$379 price point had Patcher not been wrong again and MS came in with $399. When MS announced $499 it gave Sony the breathing space to take a smaller loss per unit.
 
Sakujou said:
wont do any good.

in europe people would even buy it with the 599 price tag, because even with the 360 selling for only 149€ no one buys it in most of the european countries :(
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Sony looks to be taking Europe free. Looks like the battle will be in the US where the price tag will be key.
 
I'm guessing they had A, B & C in regards to what price they were going to. Then when they knew what Microsoft was doing they made their choice.
 
Sony is underselling PS4 at that price tbh.

Casuals will eat up the whole deal of XB1 being much bigger and cost an extra $100, they'll assume that it's more powerful.
 
Jeff is normally right on a lot of things but pricing of something with that much investment and time would not be decided just like that. The only way it is possible is if Sony had a range in which it could price the console and that gave them leeway to change on the day. But that seems incredibly unlikely
 
Microsoft and Sony set aside $1 billion dollars each.

Microsoft decided to use it to buy exclusives. Sony decided to use it to cover the losses of the $399 price.

End of story. We'll see which is more effective.

Source: my ass.
 
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