Microsoft has been making a lot of noise in the past few days about its price-cut-fuelled European market performance, claiming that Xbox 360 sales during November were 124 per cent up on sales in the same month last year, as against a 3 per cent rise for PlayStation 3. Time for the Sony counterattack.
Sony Computer Entertainment Europe (SCEE) President David Reeves has told MCV that PS3’s installed base is still thousands of units larger than that of the Xbox 360 on the continent. "I am confident that in PAL territories our installed base is 300,000 units ahead of Xbox 360,” he said.
Reeves dismissed the prospect of a PS3 price cut, commenting that "our strategy is very much value added.” Apparently the "elastic" business model Sony employed for PlayStations 1 and 2 is a thing of the past. “When we came into the industry we started at zero. And we had to have a model that offered price elasticity. As soon as we got the manufacturing price down on PSOne we lowered the price. Same with PS2.
"But we’re not doing that on PS3 -that’s not the model, even if people are expecting it.
"We’re relying on the fact that the industry will keep growing and while we might have a comparatively smaller share of the market we will have higher sales," Reeves went on. "PS3 is tracking where PS2 was at the same point in its life. The value added strategy will continue for some years to come."
He did, however, suggest that Sony would adopt a more pugnacious pricing strategy once the PS3 is sold at a profit. "We are a in a solid position, and are not lackadaisical. Next year we are probably going to be a little bit more aggressive when we reach the break-even point."