TGS 2006: Price cut for Japanese PS3
SCEI announces a new price for the Japanese base model.

- The Tokyo Game Show has just started, and Sony Computer Entertainment already announced two major changes in its PlayStation 3 launch plans.

First, Ken Kutaragi announced that the base 20 gigabyte PlayStation 3 model will now include an HDMI port, like the 60 gigabyte version. But the most surprising news is the huge 20% price cut announced for the base package in Japan; Japanese gamers will be able to get a console for just 49,980 yen (430 $) instead than the previous 62,790 yen (540 $). It is the first time Sony has cut the price of its console before launch; it's obvious this move is a result of all the troubles Sony had to face during the latest months and a response to Microsoft's and Nintendo's plans for their next-generation consoles.

The Xbox 360 might be the opponent to beat in North America, but the new, innovative, and low priced Nintendo Wii will more than likely be a terrible antagonist on a worldwide scale. The Wii will introduce gamers to a new technology, available at low prices (25,000 yen in Japan, 250$ in North America, 250 Euro in Europe), and backed up by some of the world's most well-known and successful video game franchises.

The Wii vs PS3 battle reminds the Nintendo DS vs PSP battle, which saw Nintendo's less powerful but more innovative console selling about 21 million consoles worldwide, against 18 million PSP units shipped (not necessarily sold) worldwide. While the DS has a smaller advantage in North America, the gap in units actually sold to the public is huge in Japan and Europe. As of August 2006, Nintendo sold 10 million units in Japan, while Sony sold less than 4 million PSPs in the same territory. And in Europe, according to Nintendo's announcement at a UK press conference, Nintendo retains 70% of the handheld market share as of September 2006.

Could the same happen with the Wii and the PlayStation 3? Difficult to say, mostly because the handheld and home console market are different, and because the huge difference in the price of the two consoles put them within different market segments. Anyhow, it seems that average gamers in Europe and in Japan are attracted by consoles that offer new types of user interaction, especially when these new technologies are offered at comparatively low prices. Unlike its competitors, which have been too busy discussing the power of their hardware, Nintendo is focusing more and more on its unbeatable line-up of first party franchises and, in the end, on the gaming experience offered to the player - and players have reacted exceptionally well to this strategy, as the success of games like Animal Crossing DS, Nintendogs, and Super Mario Bros DS has proved. With the Xbox 360 being a tough opponent in United States, also thanks to its Xbox Live platform, Sony should probably focus its efforts more than ever on Japan and on the "rest of the world", which reacted badly to the delay of the PlayStation 3 launch outside North America and Japan. Finally, SCEI should put more and more resources in the development of lasting first and second party quality franchises and in getting true exclusives for the PlayStation 3, even more than it has done with the PlayStation 2. Average players want quality content, not meaningless numbers on a fact sheet.

All things considered, a price cut also for the Old World and maybe North America isn't unlikely at this point.

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(Posted: Friday, September 22, 2006, 10:40AM GMT)

- Harry

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