Whilst the PS3 has seen a major price-drop in the USA, here in Europe the 60GB console is sticking firmly at its original price. So, is this another case of Sony hating Europe? Will we be seeing a price-drop in the future? What’s the justification for such a decision? Sony attempt to explain things.

SCEE president David Reeves has a lot of explaining to do. With a $100 cut in the 60GB PS3 in the USA and nothing (yet) in Europe, there is a bit of animosity towards Sony from their fan-base over here. In an interview with Three Speech (the semi-official blog that sort of isn’t run by Sony), he had the following to say when quizzed on why the UK didn’t get a PS3 price-cut…

David Reeves: If you’re a consumer — and we introduced the PS3 in March for £425 or 599 Euros – let’s say you bought one at the end of April and have been using it, playing Resistance: Fall of Man and MotorStorm. We’ve only been on the market for three and a bit months. Our thought process was: “Wait a minute – we’re actually not doing too badly – we’re not selling as well as Wii or DS – but seasonality-wise, compared to, say, PS2 at the same time we launched it in 2001, we’re actually doing quite well on a regional level”. It’s exactly the target that we sought. July is not really a gamers’ month unless you get a big, big title. So we thought if we reduced the price, we’d annoy a lot of people. We did think about it, but we also felt that it wasn’t doing that badly. In the US, they’ve been going for more than six months, so they took the decision that going down in price was a better thing to do than a value pack.

Q; The fact remains that right now, if you want to buy a 60GB PS3 over here – admittedly with an extra controller and game – it will cost you £425, but in the States, it will cost £250. That raises the spectre of grey-market imports, which Sony has been tough on in the past. Is that something that worries you?

DR: The value in there is £120 to £125. We know that most people, anyway are going to buy two to 2.5 games. So when you do the maths, it’s going to be $499, which is £250, plus two games and a Sixaxis controller. So that’s going to come up to £380 to £390. But there’s VAT in Europe, so you have to take 15 per cent off, and there’s GST in the US, and the average sales tax is 8.5 per cent. So when we did the maths, and this is the case in Australia as well, they are exactly the same. We could have omitted the Sixaxis controller and just put two games in, but it wasn’t enough – we wanted to have a level playing field. But not drop the price – because we believe that dropping the price in the summer doesn’t work.

If you drop the price in the summer, the sales rate goes up for a couple of weeks, because there’s not much demand out there, and then the sales rate comes down again until you get to the end of September/the beginning of October, and it all starts to heat up. We’ve had more success doing that either earlier in the year, in March, or later in the year, but doing it in the summer just hasn’t worked for us. We’ve tended to do these starter or value-added packs, and people have come out and said: “You know, that’s not bad”. That keeps us going in the summer. But we realised we had to – to use an old Chris Deering expression – take some air out of the tyres to get to the next level.

Q: But a spanner in the works is that GameStation, pre-Value Pack, were selling PS3s for £399 with a game. There must be something going on when retailers voluntarily slash their margins. Do you think we’ll see more retailers dipping under the £425 RRP?

DR: I think, in the UK, yes. In the UK, there’s intense competition. The situation in the UK is unique – it is so competitive. People are going to come out at £399 with a game, to get people into the store to buy another game and another game. That’s the name of the game. In France, for example, you can’t do that because there’s a law on price-control. In Germany, they hold the prices – you can even go onto amazon.de and they won’t pull the prices down or put offers in. In Switzerland, too. Even in Russia, they’re not discounting. I do think that the UK is a unique situation and you’re going to see all sorts of deals.

Q: Everything you’re saying indicates there will be a price-cut before Christmas – can you comment on that?

DR: We don’t plan these things just from one week to the next –we look at these things in the context of an overall plan and overall budget. Our plans are in place – we know exactly what we’re going to do and when we’re going to do. I’m not going to answer your question, because that would get me into tremendous hot water. But we have a plan and we’re going to stick to it. We are confident but not arrogant about reaching a very, very good installed base on PS3, and having the same momentum that we had with the PS2. We’re not putting our heads in the sand – we know it’s not selling that well, but we know that it’s selling according to the targets.

So, all very mysterious then. In reality though, we can’t imagine Europe taking this sort of consumer abuse from Sony. It simply doesn’t make sense that the PS3 can retail for such a dramatically lower price in the USA and still at such a stupidly high price over here. Hopefully Sony see sense and drop the price so they can really take on the Christmas market.