Yesterday, Sony announced it is slashing the price of the PlayStation 2 down to $99.99. While cutting the cost of a decade-old system isn't exactly earth-shattering, it does bring up an interesting question: Is the lower price going to spur sales of the console and its software?
Jesse Divnich of analyst firm EEDAR, thinks so. "We are extremely pleased to see that SCEA today announced a $30 retail price cut for their PlayStation 2 hardware in the United States market," Divnich said. "In terms of sales, we expect the PS2 price cut to increase hardware sales 30 percent ahead of last quarter in the North America (January through March 09) and to increase hardware sales by 10 percent year-over-year for quarter 2 (April through July)."
As for software sales, EEDAR said, "Before the announcement of the price cut, we expected PS2 software sales, a good measure of a console’s health, to decline to 16 percent April through July. We now expect PS2 software to maintain an 18 percent market share among home console unit sales for quarter two."
Others aren't so sure, including some at Sony itself.
During an Edge Online interview with Jack Tretton last July, Tretton said, "I want to understand the consumer that says ‘$129, too rich for my blood, but $99, I’m all over it’. How much software are they ultimately going to buy? If that $30 was the difference between buying a console and not buying a console, how many games are you going to sell to that person? While I value every consumer I just don’t know if that consumer is really going to be strategically important to the software development community and to us."
I'm going to put on my game analyst hat here and say that the PlayStation 2 price-cut may stop or slow the decrease in sales of the PlayStation 2 console, but I doubt it's going to boost the numbers. The PS2 is by far the cheapest console for sale and while that's a selling point, most people would regard it as a "second class citizen." Maybe it's something you'd buy for kids. There might be a small percentage of nostalgic gamers replacing a broken system from the past, but I just don't see a huge bump in numbers coming.
As far as software sales, come on. A consumer who is sweating the last 30 bucks on his console price isn't going to line up to purchase a bunch of games. Tretton is dead right here.