Is Sony Bluffing About PS3 Pricing?

Even if the PS3 does release around the $300 price point or even less, Microsoft is still in a better position by entering the next generation race 8 to 12 months before the competitors. Console manufactures have historically sold each console at a steep loss per unit, where console licenses for each game sold on the system bring in significant revenues down the line. Many analysts have claimed that Sony in fact often sells hardware at a loss to maintain brand strength and market share, with Sony’s video game revenues and movie divisions subsidizing at least portions of the hardware businesses.

Early adopters and many hardcore gamers will no doubt buy the Xbox 360 at the proposed $300 and $400 prices, and the more expensive bundles of games and accessories will likely increase the overall stigma of a “must have” item. This higher price point will lessen the loss that Microsoft experiences form each console sale and help the bottom line. When the final pricing for the PS3 is announced and it goes on sale, Microsoft will be in a position to decide whether or not to drop the price to be more competitive with Sony’s release. Plus, Microsoft will have many months to monitor consumer views on the high prices and new technology.

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