Sony's PS3 With Blu-ray Gets Back As A Player
Sony appears to be coming up with a winning formula. Amazing what a steep price cut will do, but you can't argue with success. Howard Stringer, Sony's CEO, is on the wires saying Sony — [SNE Loading...
Context & Ripple Effects
The PS3's turnaround closes a loop that opened in August 2006, when Wired asked whether the PS3 could save Sony at all after a botched, expensive launch. By June 2007 Stringer had declared Sony in recovery mode, and that same month Sony cut prices on its standalone Blu-ray players — an early sign the company would use price, not prestige, to fight the HD DVD camp.
What changed this week is scale: a $100 U.S. price cut plus a new low-end model pushed U.S. PS3 sales to more than double within weeks, per Stringer, and the console is being recast as a Blu-ray value play rather than a premium gaming box. That matters doubly because Stringer told Ars Technica days earlier he wished he could avert the high-def format war entirely — every PS3 sold is also a vote for Blu-ray in that fight.
First-order effects
- Sony's cheapest PS3 configuration now undercuts the cost of buying a gaming console and a standalone Blu-ray player separately, making the bundle the company's main weapon against both HD DVD players and rival consoles this holiday season.
Second-order effects
- HD DVD's backers face a moving target: each PS3 price cut effectively lowers the floor price of Blu-ray playback without Sony discounting Blu-ray discs or standalone players, forcing Toshiba's camp to respond on hardware pricing it cannot easily match.
- A doubled install base of Blu-ray-capable consoles strengthens Sony's hand with Hollywood studios weighing exclusive high-def releases, since disc publishers follow installed hardware.
Third-order effects
- If the pattern holds, game consoles finish their transformation into living-room media hubs where the disc-format war is decided by console attach rates rather than standalone player sales — a structural shift that leaves format backers without consoles dependent on partners' pricing decisions.
The trend: Console makers are using aggressive hardware pricing to convert gaming devices into mass-market high-definition movie platforms, letting the PS3 do for Blu-ray what dedicated players could not.