08:43 09.05.2006 | All news from "Tech News and Articles"
Sony to launch PS3 at $499 (Reuters)
Sony won the previous generation battle as its PS2 outsoldthe original , but Microsoft is expected to capitalize on ahead start to at least gain ground this time with its Xbox 360console in a global gaming industry expected to generate about$30 billion in revenue this year.
Sony's standard PS3 will have a 20-gigabyte hard drive anddebut on November 11 in Japan and November 17 in most of therest of the world. The unit will retail for 59,800 yen ($536)in Japan and 499 euros ($634) in Europe.
The Japanese electronics giant also showed off amotion-sensitive wireless controller, a feature similar to thecontrollers being offered by Nintendo Co. Ltd. in its upcomingWii game machine.
Wedbush analyst Michael Pachter said the price wascompetitive and the controller would be reason enough for manygamers to wait for the PS3 rather than buy Microsoft's Xbox360, which was launched late last year.
"I think they are going to kick Microsoft's butt," he saidafter Sony showed off the controller in a news conference aheadof the Electronic Entertainment Expo, the largest video gameshow in the world which begins later this week.
Video game fans have been waiting to see what Sony wouldoffer, and especially at what price, in order to decide whetherto wait for the PS3 or buy an Xbox 360 now.
$600 BARGAIN?
Sony will also sell a PS3 with a 60-gigabyte hard drive for$599 in the United States. All Sony's units will include aBlu-ray high-definition DVD player. Microsoft's premium Xbox360 package, which does not include an advanced DVD player andhas a 20-gigabyte hard drive, costs $400, by comparison.
"As just a game console it is expensive, but not if youthink about it as an entertainment center," said Koichi Ogawa,chief portfolio manager at Daiwa SB Investments. "The price maybe somewhat tough for Sony. If you consider the costs, theprice probably should be higher."
The larger hard drive allows users to store more games,music and other downloaded content onto the PS3, while somesoftware developers said the extra storage capacity allowed themachine to load games faster.
Sony's Bluetooth-powered motion-sensitive wirelesscontroller is shaped like the controller for the currentgeneration machine, but the advanced controller can shiftobjects in games when a player moves the unit, without pushingbuttons. In a demonstration, a virtual duck lifted out of a tubof water when the controller was jerked upward.
Sony expects to hit the market with 2 million PS3 consolesat launch and a total of 4 million by the end of December 2006.Analysts expect Microsoft to ship up to 8 million Xbox 360units before Sony launches the PS3.
Ken Kutaragi, Sony's game unit head, also known as the"father of the PlayStation," told Reuters that this would be ahuge year for the video game industry and Microsoft's earlyadvantage was not a great concern.
"We have not paid much attention to market share in thepast, and that is still the case," Kutaragi said on thesidelines of the Sony news conference.
The success of the PS3 is crucial for Sony as a company.
At stake is not only continued dominance in the gameindustry but leadership in the next generation of DVDs, thecommercial viability of the Cell processor that powers the PS3and possibly control over the future living-room electronicsaround the world.
It's also an expensive bet.
Tokyo-based Sony plans to take a 100 billion yen operatingloss at its game division in the current fiscal year due tocosts related to the PS3 launch. Game machines manufacturersoften lose money on the initial sale, but recoup those lossesover the life of the product through software sales.
"Unless there are some amazing launch titles that turn upin the next six months, I think it's going to be pretty toughgoing for Sony," said Hiroshi Kamide, game analyst for KBCSecurities. "It's still going to lose money hand over fist atthese prices."
Shares of Sony fell 50 yen, or 0.88 percent, to 5,610 yenin afternoon trade on the Tokyo Stock Exchange.
(Additional reporting by Daisuke Wakabayashi and KempPowers in Los Angeles, David Dolan in Tokyo)
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