The lead up to Christmas 2015 has resulted in some seriously aggressive pricing by Sony, dropping the RRP of its flagship console to $479.95, but retail has taken it a new level: PlayStation 4s are being sold below $400 in major Australian stores like Target and Big W. What's going on?
This is Australia. We're not used to this. Why did we get it so good all of a sudden?
According to Michael Ephraim, the Australian Managing Director of PlayStation, it's a combination of factors.
"We haven’t had a price drop since launch," he told us, "and we just wanted to keep the momentum going. We want to hit the broader market, so this was the best time for a price drop."
Speaking from Paris, where Sony just announced a host of new games and expanded on plans for PlayStation VR, Ephraim said that it was "early days" but the price drop has resulted in a spike in Australian PS4 sales. "We're expanding on our lead in Australia," he said.
The official price drop took the price of a 500GB PlayStation 4 down to $479.95, but that's just the starting point. Kmart were selling the 500GB PlayStation 4 at $349 and yesterday it was possible to pick up a 1TB PlayStation 4 alongside The Uncharted Collection for $411.75 on Target's eBay store.
Michael Ephraim told us that this sort of discounting is largely outside of Sony's control.
"We cannot dictate what retail does, we just set our own recommended retail price but — historically — discounting is a normal practice. Retail has realised that the PS4 is high on the wishlist and they want sales."
Three or four years there was a feeling that Australian gamers were being stung by overpriced games and overpriced consoles but today — especially compared to European regions — it's starting to feel as though we're getting the better end of the bargain. The RRP of the PlayStation 4 in the UK, for example, is 299.99 pounds. That converts to roughly $630 Australian.
Ephraim would like to take credit for our turn in fortunes, but he maintains that, locally, Sony has always tried to create fair price points for PlayStation consoles. It's just that, as of this moment, the exchange rate plays in our favour.
"We always try to give the best price possible," he said, "but a lot of it is to do with the exchange rate. At one point the dollar was sitting at $1.10 and now we’ve seen a 35% drop. Now you compare between regions and video games and consoles are cheap in Australia. We’ve always tried to take all considerations into account and we’ve always priced as best we can. Right now we look like good value because of the exchange rate.
"Australia is an important market. There’s always this perception that Sony doesn’t worry about the Australian market, but we see it as a really important market."