UK PS3 Explained by Sony

[QueenB]

As usual, we have to pay more for the PS3 than Japanese or American gamers. Not a huge surprise - Sony seem to hate Europe .

Sony have spoken up and an article in the UK newspaper The Guardian covers the story:

Originally Posted by The Guardian

PS3 launch price is no fun for UK gamers

We have to wait longer for the new PlayStation to be released here - and we'll have to pay more for it too

Steve Boxer
Thursday February 1, 2007
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The palpable sigh of relief emanating from the games industry last week when Sony finally announced that the PlayStation 3 will reach the UK on March 23 was swiftly drowned by howls of outrage from consumers (expressed vehemently on The Guardian's gamesblog) regarding the next-gen console's RRP of £425.

Hard done-by UK gamers were understandably unhappy at a price that compares unfavourably, to say the least, with US and Japanese prices of $599.99 and ¥60,000 - roughly £300 and £250 - respectively. So why will the PlayStation 3 cost so much more in the UK, even though we will have waited four months longer for it than the Americans and Japanese?

There was only one thing for it: an audience with Sony Computer Entertainment's UK managing director, Ray Maguire - the man who dictated the PS3's UK price. Maguire puts the finger on a number of reasons. First comes the most obvious: VAT. He says: "There's a compulsion within the media to look at everything as a snapshot, and do a calculation, normally based on just the RRP in somewhere like the US and just the RRP in the UK. What you should do with the RRP from the US is add sales tax."

Currency relationships

Maguire adds that VAT varies from "lesser" rates in mainland Europe to an "extortionate" one in Ireland. Which does, at least, explain why the PlayStation 3 will cost €629 (£415) in Ireland as opposed to €599 (£395) in continental Europe. But merely adding VAT of 17.5% to the US RRP would take us up to £352 - a still whopping £73 premium.

Maguire argues that merely comparing RRPs is too simplistic an approach, due to exchange rate considerations: "When businesses trade, they hedge. It depends what currency you're buying against. We don't buy anything in dollars, so the dollar can go up and down. If it were $1.40 to the pound as it was a while ago, then the PS3 would be a bargain compared to the US; if it's anything more than that, the UK price appears to be comparatively expensive. But we're dealing with euros and yen - it's about the relationship between those currencies."
Maguire points out that a fluctuation of 2p on the sterling-euro exchange rate - from the current 66p to 68p - equates to a £12 swing on the cost of a PS3, which would roughly put the UK on a par with the rest of Europe.

He adds that the cost of living is higher in the UK, which means Sony has to pay UK staff more, transport to shops is more expensive and retailers take a bigger chunk than in the rest of Europe. But when he points out that he has to hedge against currency fluctuations - "You don't want to be in a situation where you're looking at a variable RRP: you have to have that fixed. So no matter what happened this year to the euro, even if it started going the wrong way, we would not put the price up" - he's on shakier ground, implying that he has erred on the side of conservatism in Sony's favour as far as the PS3's price is concerned. Nevertheless, he insists: "Of course, I would dearly love to have the PlayStation 3 RRP under £400, and at such time as we can afford to do so, we will."

Consumer demand

The PS3 price controversy could have been alleviated somewhat if the cheaper version of the machine - with a 20GB instead of 60Gb hard disk, no built-in Wi-Fi and no memory card slots, which Maguire has said in the past would retail for around £350 - was also going on sale, but there will be no 20GB PS3s in the UK at launch. Why?

Maguire says that's consumer-led: "They want to put their own media on it from day one. So a big preference has been shown towards the 60GB model. And when we look at the sales figures from both Japan and the US, that's reflected at retail. You can either have not enough of both in the marketplace for day one, or you can have round about the right amount of one." Again, Maguire's words contain a hint of disingenuousness: consumers can still get their photos and video on to 20GB PS3s via USB cables, and the hard disk is user-upgradeable.

In the meantime, we can take our medicine or pray for the pound to collapse (which would bring about different woes), or for the euro to collapse against the yen (which might let us buy cheaper PS3s from Europe, which would upset UK retail). And that presumes exchange-rate fluctuations actually would have an effect on the PS3's price - rather than marginally reducing the loss on every unit that Sony sells.

Under starter's orders

The PS3's launch line-up of games is - typically for a new console - sketchy, with a preponderance of games that have already appeared on the Xbox 360. But there are some compelling early efforts.

MotorStorm - Developed in Runcorn, of all places, this high-octane off-road racing game features machinery ranging from dirtbikes to trucks, racing around a startlingly realistic rendition of Monument Valley, and mud with varying levels of squishiness. The best advert for what next-generation gaming is all about.

Resistance: Fall of Man - This first-person shooter may seem conventional when compared with the groundbreaking Gears of War on the Xbox 360, but it's meaty, well made and absorbing, with a decent storyline and great weaponry.

Formula One - Stunning-looking, with incredible dawn practice and wet-race effects, plus great car-feel - but it's hardly original.

Virtua Tennis 3 - The PS3 version of Sega's tennis game is gloriously playable, and its virtual players are extremely lifelike - but you can't play it online, unlike the Xbox 360 version.

Comments? I'm shocked at myself. I believe Sony. They can't make it any cheaper ......or can they? What do you think?

[Bex]

and come to mind.

I'll just stick with my theory that Sony hate Europe, it seems to work, considering what they did to Lik-Sang too


"Higher cost of living"? I'm not going to say too much on that, but, it all inter-relates if you ask me. Yeah, we do pay higher costs for pretty much everything. For the exact same things which are cheaper else where, but, if everything was about the same price, then, it wouldn't be a higher cost of living in the first place imo. Ok I know theres probably more to it than that, but, it just seems so simple as to why.