Despite the many negative reactions over the pricing of the PlayStation 4 and its games in India, Sony is quite confident about the console's prospects, especially in the launch period. Speaking with MCV, PlayStation country manager Atindriya Bose acknowledges that at Rs 3,999 per game (for first-party anyway), the running cost of the PS4 in India is higher than many would accept, but maintains that there's little Sony can do to bring prices down in the near future.
I understand the purchasing power and the business scenario in India, so certain prices may look unattractive, but at the same time, we need to create the business model first within these prices and keep investing in getting more and more gamers in. Unless that viability is there, the attraction towards this market for publishers will be limited,” Bose said.
The negative reactions to Sony's PS4 game pricing were further amplified by the fact that several third-party publishers have priced their PS4 games lower. Ubisoft's games will retail for between Rs 2,999 and Rs 3,499; Square Enix will release Tomb Raider for PS4 at Rs 2,999 and Thief at Rs 3,499 or lower; and the two Warner Bros launch titles are priced just Rs 2,499 (all PS4 game prices for Indiahere). It's a reversal of roles from the PS3 launch days because it's now the third parties who are being more aggressive in the India market.
They are. When I look at games like NBA 2K14 or Injustice: Gods Among Us, those prices are definitely more aggressive. We have looked at the €59.99 price and then created certain price points for India, but from our side, this is just the start and we will have to see how things pan out.”
Bose also seemed to suggest that the higher game prices are part of a balancing act to soften the blow of the lower attach ratios that Sony expects with PS4 games and peripherals, and to perhaps recover the negative impact of subsidies on the PS4 hardware.
We have to look at the overall business; not just the console. When it comes to televisions, there's just the television, whereas we are the complete solution – consoles, games and peripherals. The attach ratio is a lot higher in the West than it is here, so all of that also needs to be balanced. So overall, the scenario has to remain positive for us to keep investing in the business. The exchange rates have not worked positively either, and while the import duty is high for consoles, it's peak import duty for games.”
It's often been the case that game prices tend to rise in India as the foreign exchange rate does, but publishers and distributors aren't so quick to drop prices when the Rupee claws its way back. Sony increased the prices of first-party PS3 games, which are locally manufactured and not imported, from Rs 2,999 to Rs 3,499 in September when the Euro stood at Rs 88-89. By December, however, the Euro had stabilised at around Rs 83-84, and yet its latest release, Gran Turismo 6, remained at Rs 3,499.
We work within certain foreign exchange rate bands, and when the exchange rate fluctuates from one band to another, the price will change. The price increase to Rs 3,499 on PS3 games happened when the Euro exchange rate went up to about Rs 86-87, whereas the previous price model (Rs 2,999) was decided when the Euro was at Rs 74. So beyond a point, it could not be managed without an increase in price. Now with the Euro at Rs 83, I cannot drop price to Rs 3,299 or Rs 3,399. We have to maintain a price structure. If there is a substantial drop in the exchange rate, we are committed to bringing prices down, but we can't change prices every time the exchange rate goes up or down by Rs 2,” Bose explained.
With the PS4 having launched in Dubai and Hong Kong last week, import units from those countries are also expected to flood the market, with prices anywhere between Rs 7,000 and Rs 10,000 lower than the Indian market price. It also hasn't helped matters that even before PS4 games become officially available in India, the grey market is already selling import versions of games for less than the Indian MRP. Games like FIFA 14 and Battlefield 4 were selling for Rs 3,799 in the grey market before MRP was reduced from Rs 4,499. Bose, however, isn't too concerned about the grey market taking away sales from the official channel, and believes the price advantage enjoyed by importers will be short-lived.
We've decided on Rs 3,999 for our games and that can hold for a while. I think this price band is alright for the official channel. For buyers other than the early adopters and hardcore gamers, the grey market doesn't provide the comfort of buying. You don't get the peace of mind. Once everything stabilises, we'll be able analyse the situation better. We're aware that grey imports are happening and the prices there are dropping now that the official Indian prices have been announced.”
In the initial days in India, the grey market had been the forerunner in terms of establishing the business. We actually have a good relationship with these businesses and we've learned to live together. So the grey market will continue and they also work with us because they realise that in the long run, the market will expand and the price gaps that exist between the official and the grey market right now will start to be filled.”
There is good news, however, for those who choose to import the PS4 from PAL territories - Europe, Middle East – as far as support from Sony goes. While Sony India won't extend warranty benefits to those PS4 consoles, there's some support should the hardware fail.
For PAL consoles bought outside India, there will be no warranty coverage, so no free replacement, but if there is a service level issue, the customer can replace the console with an Indian PS4 by paying 50% of the Indian MRP. For anything that is non-PAL and non-SCEE, there will be no warranty or support whatsoever.”
Sony still has no plans to begin servicing and repairing PlayStation consoles in India though.
We had created a service facility for the PS2, but so many chipped consoles were coming in that there was never enough volume. So as of now, we'll continue with the replacements.”
While Bose concedes that Rs 3,999 for a game might be too much for most consumers, he believes that Sony's aggressive push towards indie games on PS4 will pay dividends here, providing more options to Indian gamers at various prices.
Many of the new gamers try to compare a free or $1 game like Temple Run with a God of War or Uncharted, which is Rs 3,499. That's 17-18 hours of content versus an hour at most of repetitive gameplay. I'm not deriding it; it's fantastic, but for those people who are making these arguments, the solution is on PSN. I think the indie games will form the backbone of the PS4 going forward and I see a huge opportunity there. And if the PS4 can build a substantial install base here, Indian IP can keep on coming onto the platform in a very smart way.”
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