Why The PlayStation 4 Is So Cheap In Australia

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."


Comments

    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.

    I don't understand... why was the price higher when the dollar was stronger? Surely it should be the other way around? Sounds like a bit of a cop-out.

      Yeah sounds a bit confused.

        What he is saying is that the price was set when the dollar was $1.10, so our dollar dropping but the Playstation price staying the same, makes the console 'cheaper' here.
        e.g. If the PS4 was AUD $499 at launch, then it would equate to USD$453, our dollar drops to $0.70, then the USD$453 console is still only costing Australians AUD$499, but USD$453 is now equivalent to AUD$712, so we are now getting a deal.

        Or to put it another way, with the Australian dollar at $0.70 today, if the PS4 is AUD$499 sony only gets USD$350 instead of the USD$453 they were getting when the Aussie dollar was at $1.10

        (Numbers just made up as an example, I don't know what the PS4 cost at launch or now)

        Last edited 28/10/15 9:38 am

          That doesn't explain the price drop (as you say, they get less money now for the same Australian dollars, so get even less if they drop the price in Australian dollars).

          Yeah maybe I should have made that a little clearer.

          Edit: I'm an idiot, please ignore me.

          Last edited 28/10/15 10:05 am

          People keep comparing the US dollar to ours... The PS4 is a Japanese console from a Japanese company. The price comparisons should be with JPN Yen if anything. All I see is excuses.

          I know the US is a directly comparable tech country but not everything in the world is made there. Just because our dollar vs theirs changes in value it doesnt mean our prices should go up when the value compared to other currencies is still closer to parity...

      My thoughts exactly, a key reason why the reserve bank has wanted to devalue the dollar has been to increase exports and decrease imports.... economics 101.

      They are talking about comparisons of what we pay compared to other people, not how they set the actual price of the console.

      So if we are paying $500 and the dollar is at $1.10 then converting to USD that is $550. So if the price of the console in the US is $400 then we are paying the equivalent of $150 more.
      If nothing changes in the prices but the dollar drops to $0.75 the conversion says we are paying USD$375 for if the price in the US is still $400 then we are getting it 'cheaper' than the US

    It's always possible that the consoles are just being sold at a loss because of the high markups on the games, especially now with all the figurine based games, which i would imagine would have a nice profit margin on them

      Skylanders is pretty much a licence to print money.

      I'm not sure how it works, though - is the licence fee just a flat amount per game or a percentage of the sale price? If it's a flat amount then the bigger margin on games like that wouldn't translate into higher revenue for the platform holder.

    Perhaps a small part of it is also laying down plans for the release of the PSVR headset, so that the hike in price for console+headset+game bundles isn't such a huge blow.

    Ultimately Sony's pricing (perhaps pricing across the games industry) seems to have unhinged itself from the exchange rate.

    Distributors seem to have worked out that the hard core consumer is not gonna pay more than $69 as this seems to be back to the standard price this year

    There's even been some real head scratchers like JB putting up Fallout 4 for $60 and Big W pricing CODBLOPSIII at $64! That's cheaper than they sold Tony Hawk for at launch!!!

      Probably because they could afford to buy larger quantities of COD, knowing that they'd be able to move that stock quickly. They would have bought a smaller quantity of Tony Hawk games and so probably would have paid more per unit.

      Last edited 28/10/15 10:35 am

        That makes sense - I remember paying $90 (and that was with wrangling a staff discount through a friend) for MW2 (for my brother) back in the day

        COD games never used to get discounted!

    I still remember paying $699 for a PS2, and the $999 price launch of the PS3. Those were the days.

      Wasnt the original PS also $999 on launch?

        Actually, you might be right. I honestly can't remember exactly, it was a long time ago now (15 years this week, right?) What I do remember is lining up at my local Target with my Dad, the same Target I worked at, and was the third or fourth person in line for one. I bought Final Fantasy 8 as my first game because I couldn't afford any of the launch games beyond that :p I played that SSX demo to death though.

          It was definitely $999, because I looked at it and laughed at how delusional the price was, and remember walking past the night it launched at Myer Pitt St. The staff erected all these bollards and crowd fences, expecting PS2 crowds and there were about a dozen people in the line.

            Looks like more then 12 people:

            http://www.news.com.au/ps3-fans-soak-up-20m-sale/story-e6frfq1i-1111113203085

        According to this it was $695 Aussi dollars in 1995.
        Not sure how much money that equates to 20 years later.
        http://www.retrogamingaus.com/wiki/index.php?title=PlayStation#cite_note-1

          That's around $1200 in today's currency. Inflation sucks.

        i bought a ps second hand with 7 games off a family friend in 1997 for $600 and it got me into console gaming and it was awesome and just got 2 months ago a ps4 with 4 games off ebay for $500 console was only bought in Feb of this year so i was happy with it.

    Target has sold 740 of the PS4 1TB Uncharted bundles for $411.
    http://www.ebay.com.au/itm/NEW-PlayStation-4-1TB-Console-Uncharted-Stan-3-Month-Voucher-Bundle-/181912186485

      That's actually ~US$ 293, which is completely bonkers. And since Americans also pay sales tax in all but a few states, we're getting an absurd deal on the PS4.

        I'll make sure to rub it in the faces of the Seppos that I know then, since got the eBay yesterday.

        Now playing the waiting game.

    I can't find these deals anywhere? It says $350 on the American target but that is in USD. Can someone give me the link

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