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Is PlayStation 3's Price Too High?

4 Jun, 2007 By: Stephanie Prange

Despite taking an enormous loss on its PlayStation 3 to get it into consumer hands at a somewhat reasonable price, Sony Corp. isn't attracting as many buyers for the next-generation console as it had hoped. During its recent financial call, the company revealed that it missed its shipment target of 6 million units by half a million, with just 5.5 million units shipped by the end of the fiscal year March 31.

At Sony's recent Gamer's Day at its San Diego development studio, the company emphasized new games as the future selling point for the Ps3, rather than a price drop. Certainly, games are important, and many analysts have noted that the PS3 has fallen short on that account. Who wants to spend $600 on a game system with very few games to go with it? (Sony recently stopped production of its lower-priced $500 unit.) To top it off, folks have to purchase an expensive HDTV.

Also, last week reports serviced that Sony would offer a beefed up 80GB PS3 (current models offer 60GB) in South Korea to make it more attractive, and that the new model could move to other markets as well.

While boosting the power of the PS3 may be nice, I'm not so sure the price isn't a bigger factor than Sony is letting on.

In last week's fiscal first-quarter call, GameStop chairman and CEO R. Richard Fontaine fielded a question about the high price of the PlayStation 3. He noted that the “price point, particularly post Christmas, is being felt” in sales at his stores. He pointed out that the European price is even higher in relation to the U.S. price. Meanwhile, Nintendo's Wii, at under $300, is a top seller at GameStop, and the chain can't keep it in stock.

Still, holding out a bit of hope for the Sony strategy, GameStop vice chairman and COO Dan Dematteo said new game titles would help drive PS3 sales in the coming months.

A lot is riding on the PS3 game lineup. Hollywood has done its part by offering a bigger selection of Blu-ray Disc movies for the PlayStation 3, giving it an advantage over HD DVD devices. Now it's up to the game makers to make the PS3 a must-have device for the gaming community.

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