Friday, June 08, 2007
The fact that the Play Station 3 comes with a Blu-ray disc drive built in was supposed to be part of its appeal (or at least a plus factor for promoting the Blu-ray HDTV-DVD format), but many people believe that it's turned out to be a detriment both to Blu-ray and the Play Station 3. The original reasoning was that Play Station fans would buy the Play Station 3 and use it to watch a movie on a complementary Blu-ray disc that came with the first run of machines. Those people would like the Blu-ray disc format so much that they'd go out and buy other movie titles on Blu-ray disc. This increase sale of Blu-ray discs would then give the format a boost in its war with Toshiba's HD-DVD high def DVD format.
Unfortunately for Sony, the reality didn't work out quite that well. While most customers who bought the Play Station 3 probably enjoyed the complementary movie, it turns out that most Play Station fans want the Play Station 3 for its video gaming benefits- not for its ability to play high def DVD's. That, combined with the fact that the inclusion of the Blu-ray disc drive raises the cost of the Play Station 3 by two to three hundred dollars, has deterred a lot of would be customers. To make matters worse for Sony, even with the high cost of each unit, profits have been negative so far for the Play Station 3.
In spite of all of this, Sony is optimistic about the Play Station 3's potential to become profitable. One can't help wondering though if Sony is trying to have its cake and eat it too by including the Blu-ray drive in the Play Station 3 for promotional purposes and expecting customers to pay for it. A better strategy- considering that the Play Station 3 isn't profitable anyway- might have been to go ahead and include the Blu-ray Drive in the Play Station 3, but price the device as if it had a normal DVD drive. This may cause the Play Station to sell at a loss, but Sony could move more units of the product because it would be more in line with what video gamers would be willing to pay. Selling a greater volume of Play Station 3's would offset the losses that Sony is experiencing now, and the loss that it incurred by including the Blu-ray drive could be offset by increased sales of Blu-ray discs and having an upper hand in the format war. Unfortunately Sony decided to take a promotional risk and now expects its customers to pay for it.