Sony Cuts PlayStation 2 Price to $14912 May, 2004 By: David Ward
It took a while, but Sony finally did what the game industry had been clamoring for and cut the price of the PlayStation 2 $20 to $149.99. At their annual press-briefing on the eve of the Electronic Entertainment Expo (E3), Sony executives predicted the move could accelerate the number of casual gamers into the current console market.
“The new $149 price point is part of our long-term vision for the PlayStation 2 platform,” explained Jack Tretton, EVP for Sony Computer Entertainment America (SCEA). Pointing out that 90 percent of the sales of the original PlayStation One came at $149 or below, Tretton added, “The potential growth for PlayStation 2 is promising.”
The Sony move, which applies to both its hardware-only SKU as well as its modem and ATV Fury game bundle, matches the Microsoft Xbox price cut to $149 in late March. SCEA CEO Kaz Hirai insisted the price drop was not made with an eye toward its competition, saying the company wanted to wait until the time was right. But the move comes at a time when the console industry in general, and the PlayStation 2 in particular, has been struggling to regain the momentum of several years ago. Over the last 12 months, PlayStation 2 hardware sales have been down 28 percent year over year.
With Xbox sales flat over the past 12 months, the only company that seemed to bring any momentum into E3 was Nintendo. Thanks to a GameCube price cut to $99 last September, Nintendo total sales, including Game Boy products, were up 7 percent during the first three months of 2004. At Nintendo's annual press briefing, Senior VP George Harrison said that even with the recent cuts by Sony and Microsoft, “It will be quite some time before our competitors can match our $99 price,” adding GameCube remains in the best position to capture many of the 20 million gamers expected to purchase a console in the next few years.
Nintendo also showcased its new Dual Screen Game Boy Advance and announced that the product will be launching this year in Japan and North America at an affordable price. The Nintendo DS features a PDA-like touch screen, microphone for voice activated gaming as well as wireless and Wi-Fi connectivity that will enable gamers across the world to play one another.
In a direct reference to Sony and its early 2005 launch of the PSP portable system, Harrison said the Game Boy franchise has successfully fought off competition from nine companies bringing out handheld game players over the last decade. “As a 10th competitor makes its run at Game Boy, the DS raises the bar before they even started.”