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Is the PS3 The Next Neo Geo?

Playstation 3Another day, another PS3 pricing rumor.

The latest group to step foward and offer their two cents on the issue is the investment firm Merrill Lynch. According to their analysis, the PS3 should retail at $900.

Engadget mentions that companies generally sell consoles for a loss initially so, if the $900 figure is correct, we can expect to pay somewhere around $600-700 at launch.

In my opinion, there is no freakin’ way that Sony can sell this thing for a price above $600 and hope to compete. My guess is that they are viewing the PS3 as a launching platform for Blu-ray and will take a big loss on the console in order to get the player into as many living rooms as possible. Let’s face it, Sony stands to gain much more revenue through Blu-ray than it would through the PS3 – but if they lose the format war to HD DVD they are in major trouble.

The bottom line is that if Sony were to sell the PS3 at $900, that would mean that they would be relegated to the same niche market as SNK was with the Neo-Geo in 1990. That console retailed for $649 in the U.S. at launch and was unable to find an audience because of its outrageous cost.

Furthermore, the Neo-Geo was, from a technological standpoint, light years ahead of the competition at the time. I mean, is the PS3 going to be that much better than the 360? When you are faced with a $500 price difference between the PS3 and the 360 but a minimal difference in performance, which console are you going to choose?

Posted by Sean

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