Yesterday, Sony dropped the price of the PlayStation 3 to $250. It was the first price cut for the console since the electronics giant introduced the slimmed-down redesign of the PS3 at Gamescom 2009. After the announcement, Sony director of hardware marketing John Koller took time out to answer GameSpot's questions about the timing of the price drop and how it plays into Sony's planned 10-year life cycle. Koller also detailed the company's assessment of the mobile and tablet gaming market and what exactly its impact will be on the financial fate of the upcoming PlayStation Vita handheld.
GameSpot: Why drop the price of the PS3 now?
John Koller: We see a lot of opportunity in the market, and I want to note that we've been planning this price drop for quite some time. We look at it in a long-term view, so 12 to 18 months prior to now, we knew that we were going to be dropping the price. We decided that the time was right now because we saw some of the market shifts occurring with new demographics to the market, primarily some of the family and casual consumers coming in, the new price point would be more palatable to them. But we also knew that the software lineup we have coming this fall is really the best we've seen on the PS3 so far. So marrying the two together was really an important thing for us.
GS: It has been two years since the last price cut on the PS3. Is that any longer than anticipated between cuts?
JK: No. As I mentioned, we don't look at these price cuts on a short-term basis. We don't react to short-term, week-over-week market trends. We knew going in that the 2009 price cut would probably stand the test of time for a few years, and it did.
I also want to note that the other rationale about having the price drop now is that our arms are wide open for Xbox 360 and Wii consumers to come aboard the platform. We knew with the software lineup we have--primarily on the PS3--the time was right to say we're open to all gamers, whether it's a second console for the household or a new one on the family demographic side. Either is great for us, and with the software lineup we have coming, we think that 360 and Wii consumers will certainly be very interested with the new price point.
GS: Given the 10-year life cycle you plan for with Sony systems, is the PS3 where it needs to be at the halfway point?
JK: Absolutely, and we're seeing a lot of momentum in the marketplace, not only for the platform itself, but the PlayStation Move and 3D. Yes, we are in great shape for where we plan to be and really see a lot of great momentum to come.
GS: So with the 3DS struggles and the PS Vita coming out, this is a point of speculation for lots of people. How significant is the impact that smartphones and tablets have had on the traditional handheld market like the PSP and DS?
JK: We view that as two separate demographics, and we've done a lot of quantitative and qualitative research to back this up. When you look at the type of consumer that's playing cell phone games currently, it's someone that enjoys smaller "kill time" gaming and has not gravitated to the larger, richer, deeper experiences that true handheld gaming provides.
We've certainly seen that on the PSP, and I know Nintendo has probably commented on it for their products, but as we go toward the PlayStation Vita, I can tell you that as we started looking at that product and the market opportunity several years ago, we saw a real strong demographic for those deeper, richer, console-type experiences. We had them on PSP, but we've taken them to a new level on PS Vita with the entirety of new ways to play.
That "new ways to play" idea, particularly for Vita, really differentiates from what's available on mobile phones or tablets and, frankly, what will be available on those platforms over the next three to five years. You're going to see PS Vita expand what a lot of people believe to be true about handheld gaming, and you're going to see a lot of those current mobile phone and tablet gamers come over to Vita. We're very convinced of that.Watch the video