Thread: PS3 Economics
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Old 11-26-2006, 06:02 PM   #38 (permalink)
hiredgun
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It's a question of class and access.

Yes, they probably could allow the market to entirely dictate the price. And then suddenly the PS3 would become a very different kind of product.

They don't want the PS3 to be a luxury good that is restricted to the wealthy. It is intended to be a mass consumer product and for that to work, the average person has to have access to it.

There are both practical and less practical reasons for this.

On the level of principle, it has to do with perceived fairness. You don't want to price the console out of the range of people who you perceive to be your target demographic. You don't want to make it an elite product. If the PS3 is really for everyone then it has to be priced that way.

More practically, the product has to permeate more of society than the top few percent, in order for it to do well in the future. When the price comes down later on, the people who buy PS3's at a discount will be those who have seen it at their friends' houses or heard other people talking about it. If no one in their social circle has access to a PS3, they may not be exposed enough to the product to want to purchase it, especially when far cheaper options are out there (Wii or even 360). Also, someone who can't necessarily afford a $1200 console may still be able to afford a $50 game or two every month, and you want to catch that revenue, not freeze it out by denying that consumer access to the console itself by making it prohibitively expensive.

The upshot of this is that those who wanted a PS3 for $600 can have one, while the secondary markets take care of the high rollers who don't mind paying a few thousand to get one NOW.
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