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September 24, 2006 5:27 pm

Sony to slash cost of PS3 in Japan

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Sony has lowered the price of the low-end version of the PlayStation3 for the Japanese market, highlighting concerns that the high price of its next generation video games console could be a significant obstacle to sales, writes Michiyo Nakamoto in Tokyo.

Sony said the PS3 with 20GB of hard drive memory will be priced at Y49,980 ($428), or a 20 per cent discount to the initially announced Y62,790.

Furthermore, the lower end model will also be equipped with a High Definition Media Interface, which previously was not included. The price of the same model in the US and Europe will remain unchanged
at $499 and €499 ($639) respectively. Initially, Sony was offering HDMI output, which will allow the PS3 to show Blu-ray disc content in high definition on a TV screen only on the more expensive 60GB model, priced at $599 in the US and €599 in Europe.

The unusual price cut comes as Sony faces stiff competition from rivals Nintendo, which is launching its next generation console in early December at Y25,000, and Microsoft, whose Xbox 360 has been on the market in Japan at Y37,900 nearly a year.

The price cut is likely to extend Sony’s losses from the games business, which it forecasts at more than Y100bn this year.

Sony said it was still evaluating the potential impact of the price cut on its consolidated results.

Namco Bandai, a leading video game software developer, said it expected the price cut to double sales of its games for PS3, with popular titles “Ridge Racer 7” and “Mobile Suit Gundam” each selling 1m units by March 2007, rather than the previously estimated 500,000 each. “The price cut by Sony should give users extra cash to buy more software,” Namco Bandai said.

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