The PlayStation 3 was a troubled machine, launching at a price that gave gamers fits, and using technologies that gave developers headaches. This is how Sony avoided making the same mistakes twice.
It's the fall of 2006 and Sony has a problem. PlayStation 3, the company's eagerly awaited and hyperbolically marketed successor to the best-selling video game console of all time, has not been well-received. The major issue is cost. With models launching at $499 and $599, PS3 is shipping a year later than Microsoft's Xbox 360 and selling for $100 higher -- $200 more if you compare it to the hard drive-free Xbox 360 Core edition.
That placed the system out of the reach of many gamers, but it was a cost necessitated by complex, custom internals -- not the least of which being the physical inclusion of an Emotion Engine CPU, the brain that powered thePS2. Sony had basically replicated the guts of the older system to enable proper backward compatibility, and, by mixing that with a very advanced processor called Cell, created a system that simply could not be sold inexpensively at launch.
Cost, though, is something that can be fixed, and Sony solved that problem. The economic implications of volume production are well understood, and video game components are high-volume things. Sony would streamline and re-factor the PS3 on multiple occasions, ultimately ripping out that PS2 backward compatibility, and bringing the cost of the higher-end PS3 down to $499 the July after launch, then introducing a new, mid-range $399 model that November. It was an effective $200 price cut in just one year.
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