Sony has released the price of the new PlayStation 4 to be 399$, looking at the price of the new PlayStation and comparing it to the ultimate competitor Microsoft and their 499$ Xbox one , Sony is planning to increase it market share by at least 10% .
Sony market based pricing is based on price skimming, this is the most commonly seen with new and innovative products, such as mobile phones and game consoles. The price is set high initially to gain those customers who will pay almost any price to get their hands on the latest gadget. once the business has profited from selling to those customers. it drops tje price to tempt other customers who may have been putt of by the high price originally. Sony is only able to this because is likely to be almost no competition in this market due to the cutting edge nature of the product, this can be related to the play station 2 where its being sold at a very cheap price of 80$ from an original price of 250$.
Moreover we can see that Sony and Microsoft use psychological pricing, where they set prices at just under the currency unit, such as 399$ rather than 400$. this is based on different reasons such as 399$ appears that it is offered at the lowest possible cost rather than being priced up to the nearest full currency unit.moreover psychological pricing pushes products into cheaper price bands.