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Fits, Starts

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A new version of the Microsoft Xbox 360 was reportedly out, I wrote two weeks ago. The very afternoon after that column went to press, the Web site “Tom’s Hardware” confirmed it.
In addition, Tom’s revealed an easy way to tell if an Xbox had the new “Jasper” chipset or not. If the side of the box says the unit requires 150 watts of power, it’s new. If it says 175 watts is required, it’s older.
Buyer beware: This new chipset and the redesign of the box along with it is supposed to solve any lingering cooling problems but it’s new. Only time will tell how big of an improvement it will be over recent models that were already modified.
Meanwhile, CNN has declared the Sony PlayStation 3 “a sinking ship.” See http://money.cnn.com. This prompted a reply from the Washington Post.
CNN’s Eric Krangel writes: “Alone among the three major videogame consoles, sales of the PS3 are down about 19 percent from November 2007, according to the latest stats from the NPD Group. Sony was only able to sell 378,000 PS3s this November, compared to 466,000 last year.” Sales of the Xbox 360 and Nintendo Wii are up.
Krangel’s statement induced Matt Peckham of the Post to reply: “That’s a fair criticism, but it isolates a superficially negative statistic while ignoring the fact that this November only included two days of post-holiday sales (11/28 to 11/29) compared to last year’s eight total (11/23 to 11/30). I’m speculating here, but if you could adjust for that difference, it’s very likely PS3 sales would have increased, however slightly, year-over-year.”
Nice try, Mr. Peckham. Unfortunately, the surging Wii and Xbox 360 only had two days of post-holiday sales, too.
Peckham keeps pushing: “What’s more, Sony rightly points out that the PS3 has seen hardware sales grow 60 percent year-to-date. I realize the PS3 wasn’t selling well in 2007, so that figure’s less impressive than it sounds, but growth is growth, any way you slice it. What’s more, look at PS3 and Xbox 360 units sold in total worldwide, and Sony pretty much throughout 2008 has actually been playing catchup.”
That was true right up until the Xbox 360’s price drop in August. Then the PS3 was left eating dust again. Peckham also leaves out the fact that the Xbox 360 came out a year before the PS3. The older console is outselling the younger one.
Rather than nitpick further, let’s look at the one area where Krangel and Peckham agree totally.
As Peckham writes: “On the other hand, CNN’s whacking the nail on the head when it raises the problem of the PlayStation 3’s price. The recession’s been on well and long enough for Sony to have reacted by now, and yet it’s stubbornly clung to that $400 entry point. Had it dropped the PS3’s price to $300 or even $350 it’s a safe bet October and November’s numbers would’ve tallied much more favorably. Both Microsoft and Sony have a solid stable of exclusives, and both have interesting companion services, but it’s price and not NXE/Netflix or PlayStation Home that’s deciding the battle at the moment.”
Analysts and the press regularly hammer Sony for not dropping the price. There has to be some reason Sony refuses to do this.
Sony’s getting clobbered by the recession, too. Sales are down across the board in a wide range of Sony products. It’s time to consider the possibility that Sony simply can’t afford to cut the PS3 price. It’s heavily subsidized at $400 already. Whatever else anybody can say about the PS3, it remains a cutting-edge machine.
It’s valid to ask if Sony should let the PS3 bleed more money or, by this point, cut its losses.
I’d argue that Sony would be better off putting any money it can scrape together into developing games that the other two consoles simply cannot handle. The PS3 is a very powerful machine. The Wii isn’t in the same league, and there has to be something the PS3 can do that the Xbox 360 can’t.

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