The complexity of a Price Cut for Sony.

[davin_g]

I know many people have skimmed over it and its very hard to convey on a forum but people need to understand the Prices of Sony's goods continue to stay high and they are having a difficult time posting profits because of the HIGH VALUE of the Japanese YEN. As the global problems in Europe worsen and the US slowly recovers people have continued to invest in the YEN...forcing its value up and up. What happens is it makes their goods more expensive abroad (exports) and makes the money (dollars, pounds, euros) they earn from sales less when they bring it back to Japan to convert. There are numerous numerous articles that describe this and help define it like these two but I just want people to understand...cutting the price of PS3 and Vita isn't as easy as the parts getting cheaper...its also why a console like the 360 gets a leg up as well from the weak US dollar. There are numerous forces at play in a global economy and business factors are very very complex. This is just one facor among hundreds that Sony faces and why we can all sit here and say how we believe we know better than Sony about what they should and shouldn't be doing....but so often we fail (myself included at times) to recognize major factors such as this one...which continues to get worse in Japan and many many others that aren't as obvious. Sony faces and uphill battle...this is just one of the head winds they are sailing into (one that benefits Microsoft) that makes things so complicated in making price changes and looking at global sales and profits on business units. Below are just a couple articles (none particluarly about Sony)...google and you can see tons more that face the japanese companies (not just Sony). Feel free to discuss and other issues that don't often get factored in when considering these price cuts.

We call and call and say how naive they are...but its not so easy. Also a reason why bundles are soo very attractive to Sony. Discuss!

http://www.post-gazette.com/stories/...economy-647103

http://www.nytimes.com/2011/08/19/bu...ngth.html?_r=1

http://news.bbc.co.uk/2/hi/7857474.stm

[Fijiandoce]

nobody wants to reply to the truth
i will +rep this post

exchange rates are an 'indirect' factor sony need to deal with. its not something that will bother them too much because they inevitably level again and its out of their control.

'Economies of scale' is something that directly effects them.
if no one is buying, output is low, and cost per unit is high.
if sales are high, output is high, cost per unit is low.

PS vita needs to be made more attractive. Gamescom has achieved this to some degree.

[F34R]

Nothing I can think of wrong with the OP. Good info for people like me that don't have the ability to consider those factors. Here's the thing though, after all is said and done, the price cuts still need to come.

[coolguy]

Sony is caught between a rock and hard place when it comes to a price drop they cant afford it .they need bundles

[DeviousOne]

bundles make the most "business" sense at this stage of the Vitas life also the "talked about" cross promotion games would also help the situation. We are a LONG way from seeing a price cut for the vita

[davin_g]

Appreciate the comments. I just think people make claims with all too often not considering or understanding markets. This is just one issue...another was what fijiandoce was saying. There are others to consider too. Some things penalize Sony a great deal more than Microsoft as with this instance. I was just trying to inject some information to people who quickly make remarks without understanding (myself included) all the complexity behind the business Sony is running.

I agree a price cut will be needed. I agree definately more content is needed. That said you see how Sony has answered that...no. This gives us a little reason why...and also highlights why they LOVE bundles and have taken the route of the free crossplay/buy route. I can't blame them for trying these things first. I'm sure there are other reasons its hard to cut prices as well and I encourage others to share. It is nice to be informed of these things before pages and pages of replies of "They should just cut the damn price" go up on every thread.