Sony announces Playstation 4 price cut in Japan, and why they need to bring that cut to the West

PlayStation 4
PlayStation 4 Credit: Sony

The Tokyo Game Show is this week, and Sony took the opportunity to hold a pre-show press conference yesterday. There wasn't a lot of news pertinent to North American Playstation owners, but we did learn that the Playstation 4 is getting a price cut in Japan.

Generally speaking the PS4 is doing quite well. Last week VentureBeat passed along Sony's claim that that PS4 was the top selling console in August in North America and had the highest software sales as well.

That said, the Xbox One isn't languishing on store shelves and Microsoft said sales were up 26% over August 2014. 

The question I have is, how long can Sony maintain its dominance? At launch the PS4 was beating the Xbox One based largely on Microsoft's lousy handling of the launch and the fact that the PS4 was cheaper. Since then Microsoft has done a great deal to fix the bad impression they originally made, plus they've cut the price to where the PS4 is the more expensive system.

In my admittedly anecdotal experience as a long-time gamer, people tend to buy the console their friends have, so that early lead worked strongly in Sony's favor. If all your friends are playing on PS4 you're probably going to get a PS4 in order to join them, even if it does cost a little more. As more and more Xbox Ones are sold this "what my friends have" factor tends to lose its potency since it becomes more likely that there isn't a clear consensus any more (and maybe your more hardcore friends now own both consoles; many of mine now do).

So how long can Sony ride this wave of popularity? I think it's about spent, personally. Here's why.

First, the Xbox One has a much stronger slate of exclusive games this holiday season including the juggernaut that is Halo 5. Halo games sell systems. Sony has Uncharted 4 coming, but not until March 2016. Microsoft also has Forza 6, which just launched, and some free-to-play titles like Fable Legends and Gigantic that are cross-platform with Windows 10. Microsoft is also launching backwards compatibility this fall, meaning many of the old titles in your Xbox 360 library will be playable on Xbox One.

Combine this with the fact that early adopters have had two years to rebuild their gaming nest eggs and we could see many former Xbox 360 gamers who switched sides to Playstation 4 deciding to add an Xbox One to their collection.

People who have not yet upgraded might decide to go Xbox One for Halo 5 or one of the other exclusives, or just because the Xbox One is cheaper. Hardcore gamers know the PS4 is more powerful but the difference is subtle enough that the more casual gamers just now shopping for a 'next gen' console might not be aware, or if they're aware they may just not care. Perhaps for them being able to play their Xbox 360 games is more important than having the console that is slightly more powerful. 

Sony needs mainstream exclusives to keep interest in their platform high, but they can't just pull them out of thin air (though they're trying to do the next best thing by brokering deals that bring exclusive PS4 content to games like Destiny and Call of Duty). So what can they talk about this holiday?

A price cut is about their only option. As mentioned at the top of this post we know the PS4 is getting a price cut in Japan; I think Sony absolutely needs to bring that cut to Europe and North America as well, in time for the holiday gift buying season. In other words, soon. If they cut the price to $349 to match the Xbox One they can play up the fact that the PS4 costs the same but is more powerful, or use their "Best place to play" campaign to push the exclusive content deals on cross-platform games.

The Playstation 4 is doing great now, but I don't think Sony can afford to grow complacent. Next year they'll have more exclusives and Project Morpheus (which is now called Playstation VR) to help hold their lead over Microsoft, but for this holiday season they need some talking point for their marketing campaigns, and a price cut is about their only option.

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