Tretton: Price Doesn't Determine A Platform's Success
See Full ImagePrice is always a big question for consumers, but Sony Computer Entertainment America president Jack Tretton says solid products will sell themselves.
In a recent Fast Company interview, Tretton said the success of a platform is determined by the "value of its features" rather than its cost. He believes the consumer "responds to value" and alludes to the amount of entertainment given by a $60 game, as compared to the total expense of seeing a movie at the theater (which may not come to much less than $60, when all is said and done). Said Tretton:
"When you're buying a platform, when you're buying technology, you're hopefully buying a device that you're going to enjoy for many years. If you look at an investment comparable to a game device be it a system or a portable - whether it's an iPod or cell phone - people are used to spending several hundred dollars to get a portable device.
Typically it comes down to; 'how good is the system and how bad do I want it?' And it's not to say that the price of the platform isn't a consideration, but I don't think price makes or kills a platform. Something that's lousy and very inexpensive is not going to be successful. Something that's pricey will ultimately find its audience if there's enough value there."
The price of the PlayStation 3 was called into question immediately - it has since been cut down to half its original launch cost - and now, everyone is wondering what the new PSP2 (or NGP) will cost. Well, as Tretton says, what really matters is how badly you want it, and whether or not you see enough value in it.
Tags: psp2, ngp, next generation portable, sony hardware
4/5/2011 9:13:42 PM Ben Dutka
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Comments (58 posts)
Godslim
Wednesday, April 06, 2011 @ 6:02:17 AM
plus i was chosen as an offical eu beta tester aswell which is great meaning i get a load of betas before everyone else
thats one thing i will give sony even tho ps3 was more expensive it does do a hell of alot
Last edited by Godslim on 4/6/2011 6:03:31 AM
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BTNwarrior
Tuesday, April 05, 2011 @ 9:36:55 PM
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4 up, 1 down
chedison
Tuesday, April 05, 2011 @ 11:20:22 PM
0 up, 17 down
Clamedeus
Wednesday, April 06, 2011 @ 12:22:32 AM
But again it depends on the person and what they like.
4 up, 0 down
Godslim
Wednesday, April 06, 2011 @ 6:04:22 AM
7 up, 0 down
Excelsior1
Tuesday, April 05, 2011 @ 9:55:39 PM
Reply
4 up, 1 down
kraygen
Tuesday, April 05, 2011 @ 10:51:08 PM
6 up, 0 down
Excelsior1
Tuesday, April 05, 2011 @ 10:58:28 PM
3 up, 0 down
Jawknee
Tuesday, April 05, 2011 @ 11:02:09 PM
2 up, 0 down
Excelsior1
Wednesday, April 06, 2011 @ 1:01:50 AM
Last edited by Excelsior1 on 4/6/2011 1:04:06 AM
0 up, 1 down
Highlander
Wednesday, April 06, 2011 @ 10:17:03 AM
4 up, 0 down
Jawknee
Wednesday, April 06, 2011 @ 10:48:48 AM
Last edited by Jawknee on 4/6/2011 10:56:38 AM
3 up, 1 down
Excelsior1
Wednesday, April 06, 2011 @ 1:04:04 PM
the perception that the ps3 was overpriced at the start of this gen cost them a lot of sales, and even seemed to linger after the incremental price drops.
your are right that i get no pleasure in pointing out sony's loss of marketshare this gen. it's not been fun watching the rise of 360, but i'm certainly not going to pretend it did not happen. it did not have to be this way.
Last edited by Excelsior1 on 4/6/2011 1:19:09 PM
1 up, 1 down
Jawknee
Wednesday, April 06, 2011 @ 1:34:22 PM
3 up, 1 down
Excelsior1
Wednesday, April 06, 2011 @ 4:49:07 PM
sony talking about working with developers on it's hardware, and the reports the psp2 would be reasonabley priced had me feeling pretty good.
i want sony to be #1, and have enjoyed hearing they finally overtook the 360. i'm not anti-sony.
1 up, 0 down
Deathstriker
Tuesday, April 05, 2011 @ 10:30:28 PM
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I payed $700 for my ps3 and resistance on DoR, but then again I was with Sony. Even if the compition was half the price. Look where there at now??
I agree if you pay alot of money for something most likely it's not for the meantime... I payed 700 bux and rent games most the time.
While people I know have bought 2-3 ds's...2-3 xboxs... some because the dsi was better then the ds, now the 3ds.... same for xbox, the new xbox slim...
1 up, 0 down
BikerSaint
Tuesday, April 05, 2011 @ 10:53:20 PM
And as for his statement....
"Something that's lousy and very inexpensive is not going to be successful".
It's a shame all those 4 & 5 RRODed re-buying bots didn't get that memo.
4 up, 0 down
Excelsior1
Tuesday, April 05, 2011 @ 10:51:17 PM
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2 up, 2 down
kraygen
Tuesday, April 05, 2011 @ 10:53:02 PM
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Like I said probably won't break it, but the more affordable it is, the more people will be able to purchase it immediately instead of having to wait.
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StangMan80
Tuesday, April 05, 2011 @ 11:41:40 PM
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But...
Consumers always look at the price first. No matter how great the thing is people will hesitate and maybe never buy the object no matter how much you want it.
The PlayStation 3 did not sell so good at Launce because of the price.
If that isn't true then what makes the PS3 today sell so good?... It's because of the price.
4 up, 0 down
daus26
Wednesday, April 06, 2011 @ 9:52:10 AM
If you think about it, there are much more casuals then gamers so you'd wonder why the Ps3, as technologically advanced as it was compared to its competitor didn't do so well. Two biggest reason on why I think that is are: 1. It's mainly marketed for gaming, and there were two other consoles that were a lot cheaper. 2. Sony has weak marketing.
Basically what I'm trying to point out is that if Sony wants to determine its success by its "value," then they better let the consumers know about it (aka marketing). Otherwise, they'll just think it just do games, and not much else.
2 up, 0 down
Highlander
Wednesday, April 06, 2011 @ 10:14:52 AM
The Wii is not HD, the only other HD console was perceived as cheaper, but in fact never really was. for an equivalently specified system, the 360 has always been on par with the PS3, despite lacking a key feature that the PS3 possesses - BluRay playback.
Even today people push the lie that the 360 is cheaper. It is not. A 360 with HDD at the MSRP is the same price as a PS3 at MSRP.
3 up, 0 down
sha4dowknight05
Wednesday, April 06, 2011 @ 2:50:55 PM
0 up, 3 down
Highlander
Thursday, April 07, 2011 @ 1:39:27 AM
As I said, the PS3 has always been on par for an equivalent configuration, except of course for the advantage the PS3 has by also handling BluRay.
Comparing a diskless 360 to a PS3 with a hard disk isn't exactly the most equal comparison, is it?
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A2K78
Wednesday, April 06, 2011 @ 12:47:19 AM
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Anyhow price is "always" a barrier to platform's adoption/success. Why do you think the iMac/MacBook had problems keeping up with the Window's platform. The same goes for 3D HDTV's which are struggling to sell, and the list goes. In fact the biggest evidence that price is always barrier stand from the fact some companies are willing to risk the razor and blade sales model to sell an expenive product at the most attractive low price. Overall though the razor and blade model really a lose-lose situation as Sony and Microsft proved as the Xbox and PS3 piled up tons of red ink for both companies.
Overall I would say of the 3, Nintendo is the smartest because they can sell a product at cost and turn massive profits in the process. The fact that the 3DS was massively profitable proved this.
"The price of the PlayStation 3 was called into question immediately - it has since been cut down to half its original launch cost - and now, everyone is wondering what the new PSP2 (or NGP) will cost."
From the ouset the PS3 was sold at a massive lost to the company, however the only reason why Sony started with a $600 MSRP was due to the fact they risk being priced out by Microsoft and their cheaper model 360's. To further add Microsoft really took it to Sony by engaging them in a price war, a price war that forced Sony to lower the price while at the same time piling up red-ink, red ink they are still piling up. The only thing cushioning it is the sales of software in which they receive big publishing roytalties from.
1 up, 1 down
kraygen
Wednesday, April 06, 2011 @ 3:05:07 AM
Where did you get that "fact" from? Everything I've read said it sold well first week, but once people got to see it they stopped buying.
Please link.
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___________
Wednesday, April 06, 2011 @ 3:17:27 AM
allot of people are returning it with eye strain, headaches, or the black screen error.
only a couple days old and its already broken?
oh my!
2 up, 2 down
Lord carlos
Wednesday, April 06, 2011 @ 8:36:41 AM
As they say on spartacus
'Words fall from your mouth as sh!t from a$$'
2 up, 0 down
Highlander
Wednesday, April 06, 2011 @ 10:06:07 AM
The fact is that Sony sells it's gaming devices at a loss, they always a) over engineer the product, and b) push a cutting edge specification. This means that their products are always extremely good value for money and very capable. The NGP looks set to continue this trend.
Regarding DS, it sold extremely well - immediately upon launch but it has a) not met Nintendo's own expectations, and b) has begun to encounter consumer resistance on the basis of eyestrain, headache and health warnings for younger gamers. Not the most auspicious launch to a product ever, and hardly a model for others to follow.
5 up, 0 down
___________
Wednesday, April 06, 2011 @ 3:14:48 AM
Reply
if not, then why all the price drops jack?
why not leave the ps3 at the ridiculous price it was from launch!?
my lord, this is so utterly stupid id expect it to come out of patchers mouth not yours!
and this guys the CEO for one of the worlds largest companies?
no wonder there bleeding money!
0 up, 8 down
sha4dowknight05
Wednesday, April 06, 2011 @ 2:02:01 PM
Do you own SONY?
WHY DO YOU CARE?
I would be worrying about your ps3.
When that thing YLODs on you, you'll be crying!
3 up, 1 down
___________
Thursday, April 07, 2011 @ 8:47:57 AM
if sony is bleeding money then that means less games.
thanks to them loosing money we lost 8 days, the getaway 3, half of sonys london studio, half of SOE, the agency, god knows what other unannounced games got canned because of the losses!
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Wissam
Wednesday, April 06, 2011 @ 4:45:05 AM
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very young. when it come to big old fans like me
or you guys its not that big deal. but when it
comes to the younger people .....
Last edited by Wissam on 4/6/2011 4:45:25 AM
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kevinater321
Wednesday, April 06, 2011 @ 6:42:41 AM
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2 up, 0 down
kraygen
Wednesday, April 06, 2011 @ 12:14:34 PM
3 up, 0 down
BikerSaint
Wednesday, April 06, 2011 @ 10:46:21 PM
Back to the PS3, I wanted aone when they first came out but due to severe money restraints for a couple years, I couldn't get one till around late 2009.
But by the time I finally was able get the 60 gigger they were no longer made, so I bought a used one in which I still paid $440, and after the 1 year extended warranty & the tax, I wound up paying almost full price for it, at $585.
And even at that $585 for a used machine, I still enjoyed every freaking second of it(until she died last month).
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gumbi
Wednesday, April 06, 2011 @ 8:32:11 AM
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Now, while price may not be the sole factor in purchasing decisions. It is absolutely a factor. I know there were a LOT of people that wanted a PS3 at launch, and wanted it baaad but had to wait because they just couldn't afford that $600 price tag ($650 here in Canada). Add taxes and a couple games to play and you're creeping up on 1G, that's a lot of coin.
I know in the months following launch there were always PS3's on the store shelves here, and they weren't moving. Obviously this had nothing to do with the PS3's value, it just cost too damn much for most would be buyers.
I've already resolved that if NGP is <= $300 then I'm sold. But as bad as I want it, if NGP is over $300 I'm going to have a real hard time with that decision.
2 up, 0 down
Highlander
Wednesday, April 06, 2011 @ 10:12:33 AM
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gumbi
Wednesday, April 06, 2011 @ 10:25:10 AM
If he's gearing us up to expect a high cost so we'll be pleasantly surprised with a lower cost at launch then I'll be ... pleasantly surprised ;)
2 up, 1 down
daus26
Wednesday, April 06, 2011 @ 9:37:38 AM
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I think a better way to say it is how the price compare to its competition. When you have no competition then price becomes a smaller factor. But when there is competition, it becomes a big factor. No matter how much a value the ps3 was at launch, it's gonna have a tough time selling when there's two other "gaming" systems in its generation that costs much less.
The NGP's main competition will be the 3DS. If it wants any chance of success they'll have to price it reasonably, compared to it. Price the NGP $200 above the 3DS for example, watch the 3DS sales fly, while NGP sales lag. Although not a portable, the inevitable competition to the NGP might be the ps3. I figured people might compare on what the two can do and see what's worth more. Then again, the other being a "portable" like laptops are to PC, it might not be as much of a factor.
I hope Tretton is not too serious about this. The beginning of the ps3 is exactly how he describes this whole thing. No matter how much of a value it had, it's main objective was gaming, and if there's two other consoles that can do "gaming," it's going to be tough. If they plan on doing the same thing to the PS4 era, or even the NGP, I wish Sony the best of luck. He says it doesn't determine success, but I say it can.
Last edited by daus26 on 4/6/2011 9:39:49 AM
3 up, 0 down
Highlander
Wednesday, April 06, 2011 @ 10:11:11 AM
It's not really the price that matters, it's the perception. iPhone proves this beyond a shadow of doubt.
4 up, 0 down
Ben Dutka PSXE [Administrator]
Wednesday, April 06, 2011 @ 10:32:14 AM
Virtually no games, an unheard-of Blu-Ray feature that hadn't yet caught on, a Network that was a shadow compared to Live, and the competition of an established next-gen console...the value just wasn't a fraction of what it was today.
If the price was still $600 and it had the same values it now has, I'm not saying it would sell nearly as well, but I'm saying it would sell better than people might think.
4 up, 1 down
sha4dowknight05
Wednesday, April 06, 2011 @ 1:59:12 PM
I agree with you and disagree.
Yes the price is a turning point.
And Still look at apple, their prices are high but lots are buying them!
I guess we'll have to see what it offers. Call of Duty will be one big selling point for this since a lot of fans will want cod on the go.
1 up, 0 down
Crabba
Thursday, April 07, 2011 @ 1:00:21 PM
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Temjin001
Wednesday, April 06, 2011 @ 10:20:13 AM
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As time goes on the cost of hardware goes down and the value of the product goes up as new services and software increase. Making the PS3 that much more lucrative with each passing day.
Today, the PS3 Slim boasts a huge library of games, critically acclaimed exclusives, a more robust PSN, larger packed in HDD's, Netflix, 3D support, and now, virtual multi-platform parity, and a solidified Blu-Ray movie medium (HD-DVD what?).
As we've observed, more and more players worldwide have taken notice and have now made the PS3 their choice platform over 360, despite the 360 having a 1 year head start in the market.
*my Sony rep PR statement for the day.... well, maybe.. year =p
Last edited by Temjin001 on 4/6/2011 10:21:24 AM
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Robochic
Wednesday, April 06, 2011 @ 10:41:57 AM
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I did get the 3DS had a lot of giftcards from my birthday and christmas and I have to say I really enjoy it.
As long as what I pay for gets me what I want and more than I am happy and I have to say Nintendo and Sony have done both for me at least. So what ever the new psp price is I could care less as long as it gives me what I really want, quality, great games, great features :)
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main_event05
Wednesday, April 06, 2011 @ 1:19:32 PM
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Last edited by main_event05 on 4/6/2011 1:20:16 PM
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sha4dowknight05
Wednesday, April 06, 2011 @ 1:55:54 PM
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2 up, 1 down
Highlander
Thursday, April 07, 2011 @ 1:41:22 AM
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PSTan
Wednesday, April 06, 2011 @ 3:21:02 PM
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But times are different now, and money's tighter than it used to be. I'll definitely get an NGP, but probably not at launch. Maybe when either the price goes down or they release an upgraded model. Having new hardware on day 1 is nice, but it's also true that good things come to those who wait.
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Lairfan
Wednesday, April 06, 2011 @ 3:37:02 PM
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Excelsior1
Wednesday, April 06, 2011 @ 6:28:24 PM
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i actually think sony will be smart about pricing the ngp now. it's just a gut feeling based on the reaction to jack's quotes. i guess we will have to wait and see. new hardware is always exciting. can't wait to learn more.
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WilliamRLBaker
Thursday, April 07, 2011 @ 12:10:31 PM
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Gamers care does it play games? are the games fun? how much is it gonna cost me to play those games.
If Price doesn't determine success then explain when the Ps3 at 599 us dollars outsold all competitors..etc?
I'm still waiting for my 1200 dollars tretton.
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Crabba
Thursday, April 07, 2011 @ 1:27:48 PM
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This price thing is a complicated issue, and it's more of a combination of everything like value, price, technology, hardware & software, marketing and not to mention press.
There was a very negative buzz all around about the PS3 at launch, for some reason I will never understand, both on the main gaming websites and gamers on forums and IMO that was probably the biggest factor for why the PS3 didn't sell well in the beginning. Maybe there was a payoff from Mickeysoft, maybe there were a lot of gamers who had just bought the 360 and were angry that they now coudln't afford the PS3, maybe there were a lot of Halo fanboys who didn't like Resistance, who knows but press and marketing is everything and Sony and the PS3 didn't have it at launch, that's for sure.
To me the PS3 had everything I wanted at launch, it had the value, technology, hardware & software and the rest I didn't care about, but unfortunately that's not the way it works.
It's a funny thing about price and value, personally I have no problems paying $500 for a console up front, but I would never pay $60 annually for some xbox live membership, but others thought paying $500 for a PS3 was WAY TOO EXPENSIVE but they had no problems whatsoever paying $60 for that network membership every year, easily passing the additional cost of the PS3 over the xbox in a year or two...
1 up, 1 down
Ather
Thursday, April 07, 2011 @ 3:33:15 PM
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But I guess the way to look at it is, not that high prices will ruin the system, but that lower prices will give them a bigger success. A high value system at na affordable price will outsell a high value expensive system 3 times over.
And what is value? Game compnaies throw a ton of stuff in, that suers might not even want, then charge a price worthy of those extras. Might make sens eif you want it, but most people don't want half the included items. Blu-Ray support is ncie for PS3, but if you have no intentions of using it, why pay for the playe rportion? Sure, PS3 was cheaper than actual players, but if you don't have any intention of using the feature, it's too high a price for a video game system. $600 for a system you'r enever going to use to it's full capacity is just too much. And why I only recently got a PS3 when it was only $400. Meanwhhile, Sony doesn't make it backwards compatible with PS2 gamnes, which is lost money right there. if they ahd made it work with PS2 games, they'd have released the system for much less. And made even more money over time. Oddly, comoanies wnat little money now, and not a lot of money later. Is it any wodner we're in a recession? People just don't think long term, and make poor business decisions.
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Crabba
Friday, April 08, 2011 @ 2:44:27 AM
Also, you do realize that every single PS3 game out there uses blu-ray discs too right? Including many PS3 exclusives like Metal Gear Solid 4, Killzone 2 & 3 etc etc utilizing a lot of the additional space available on blu-ray compared to if the PS3 had only had a DVD drive, meaning those developers would otherwise had to do one of two things: remove things from the game to make it smaller, or 2: split the game up to 5+ DVDs or more... blu-ray is not just for movies.
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tayizfire
Friday, May 13, 2011 @ 1:26:14 AM
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1 up, 0 down
Jawknee
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Tuesday, April 05, 2011 @ 9:35:40 PM