Sony: Were ahead of Xbox

Sony has moved to dispel Microsoft claims that Xbox is outselling the PS3 in Europe, revealing internal figures that say its console has sold 300,000 more units than Xbox 360 in PAL territories.

And the company doesn’t feel it has to follow Microsoft and further ignite consumer interest with a price cut of its own anytime soon.

SCEE president David Reeves told MCV that Sony will remain focused on the value offered by the PS3 and its extra functions and services – at its current 299 SRP.

No we are not going to go down in price; neither are we going to go down in price on PS3 in spring time either. Absolutely not, whatever you might have heard to the contrary,” he said – referring to purported ‘leaks’ from a Sony meeting two weeks ago that claimed Sony had a price cut planned for March ‘09.

Our strategy is very much value added.” Reeves added that Sony’s business model for the console isn’t designed around dropping the RRP every time a manufacturing cost saving has been found. And he was keen to point out that, according to Sony figures, the PS3 is already ahead of Microsoft’s rival.

I am confident that in PAL territories our installed base is 300,000 units ahead of Xbox 360,” said Reeves.

When we came into the industry we started at zero. And we had to have a model that offered price elasticity. As soon as we got the manufacturing price down on PSOne we lowered the price. Same with PS2. But we’re not doing that on PS3 – that’s not the model, even if people are expecting it.

We’re relying on the fact that the industry will keep growing and while we might have a comparatively smaller share of the market we will have higher sales. PS3 is tracking where PS2 was at the same point in its life. The value added strategy will continue for some years to come.”

Plus, at a time when Sony is first looking to put its Computer Entertainment division in the black after two years reporting losses, a big emphasis at SCE has been on returning to profitability.

However, Reeves hinted that once Sony has rebalanced the PlayStation business, retail can expect the firm to up the ante:
We are a in a solid position, and are not lackadaisical,” he commented.

Next year we are probably going to be a little bit more aggressive when we reach the break-even point.”