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Sony Gearing Up for Another PS3 Price Cut for November 2

8 Oct, 2007 By: John Gaudiosi

According to multiple retail sources, Sony Computer Entertainment America will bring its 40GB PlayStation 3, which just shipped in Europe, to the United States on Nov. 2.

The 40GB PS3 will retail for $400, which is $200 less than the new 80GB PS3, which retails for $600 and comes bundled with the MotorStorm game. Some retailers are still carrying the discontinued 60GB PS3, which sells for $500.

Like its European counterpart, this PS3 will not offer backwards compatibility with PlayStation and PlayStation 2 games. Other differences in the new hardware include just two USB ports (instead of four), and no multi memory card port. One addition to the new hardware may be the Blu-ray Disc version of Spider-Man 3, which streets October 30, according to online reports. Sony previously bundled the Spider-Man 2 UMD in its PSP at launch for a limited time, so there is a precedent.

“I think you could see a hardware spike if Sony really does bundle Blu-ray movies inside the box,” said Michael Pachter, videogame analyst for Wedbush Morgan Securities.

John Taylor, videogame analyst with Arcadia Research, said: “That 40 GB PS3 is likely to help Sony achieve estimates that are out there (unit potential in the range of 3 to 3.5 million for calendar year 2007 in the United States), but I don't think it will bring upside. The library is still waiting for driver titles.

“Moreover, there is concern at retail that split release dates between Xbox 360 and PS3 will give Xbox 360 more marketing money, and a de facto exclusivity window, because PS3 titles are getting completed and certified later.”

Pachter said that Sony is going to sell about 50% more PS3 hardware units every time they cut the price by $100.

“From $600 to $500, we saw units go from roughly 100,000 per month to roughly 150,000,” Pachter said. “When they cut to $400, units should jump to 225,000 (which is what the Xbox 360 averaged before its price cut). Of course, that is for ‘normal' months, meaning January through October. November sales are typically twice that, so maybe 450,000 units, and December sales are typically four times that, so maybe 900,000 units.”

The question still remains whether Sony will drop the $600 price tag of the 80GB PS3 down to $500, and cut the game bundle. Although Microsoft has had success with three versions of Xbox 360 for sale, including the $450 Xbox 360 Elite with 120GB hard drive, the $350 Xbox 360 Premium with 20GB hard drive and the Core System for $280; Sony is expected to stick with just two versions. Historically, Sony has only offered one version of its hardware with PS2 and the original PlayStation, as subsequent, cheaper hardware replaced the older hardware at retail.

Microsoft, which has had success with its Limited Edition Halo 3 Xbox 360 20GB hardware, which retails for $400, has now added two free games to the purchase of any Xbox 360 Premium or Elite system beginning later this month. Gamers will receive Microsoft's Forza Motorsport 2 and Activision's X-Men: Ultimate Alliance with their hardware purchase at any U.S. retailer.“On Xbox 360, I get the sense that Halo 3 gave hardware velocity a nice boost, bringing the September total up to north of 400,000 units sold,” Taylor said. “If this is sustained [on a weekly basis], it puts Microsoft in a position to sell through 4.5 to 5 million Xbox 360s in the U.S. this year.”Pachter said bundles are always good because they cost little to include (Forza is $1, Marvel probably $8) and have a perceived high value to the consumer. “I think it will matter and I think it's necessary to counter the argument Sony will make that a $400 PS3 is a better deal than a $350 Xbox 360,” said Pachter.

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