Sony to Expand PS2 Business, But No PS3 Price Cut

Sony Computer Entertainment Inc. (SCEI) opened Japan's biggest computer gaming event on Thursday with a keynote speech that promised a new PlayStation 3 controller and expansion of its PlayStation 2 business, but not an anticipated price cut.

Kaz Hirai, the recently appointed president and CEO of the Sony Corp. gaming unit, said SCEI plans to put more effort into expanding its PlayStation 2 business. At the same time it will continue to push the PlayStation 3.

The plan is unusual because gaming companies typically de-emphasize old consoles when newer versions become available, but Sony's in an unusual situation. Instead of snapping up the PlayStation 3, many consumers have shunned the console because of the high price.

The console costs %59,980 (US$517) in Japan for the version with a 60G-byte hard-disk drive, versus %16,000 for the PlayStation 2. The competing Xbox 360 costs %38,800 for the full version and the Nintendo Wii costs %25,000.

At those prices it's little surprise that in Japan, Sony's home market, the PlayStation 2 continues to outsell the PlayStation 3. In the week of Sept. 3 to 9th, the PlayStation 2 sold 13,360 units in Japan against the PlayStation 3's 13,248 units, according to data from Media Create Co. Ltd.

As part of Sony's new plan, it will promote the PlayStation 2 in developing markets while also continuing to publish new games.

Many had been anticipating that Sony would use the Tokyo Game Show keynote to announce a lower price for the PlayStation 3. It was at the same event last year that Ken Kutaragi, then president of Sony's computer gaming unit, announced a cut in the price of the PlayStation 3 after criticism from both the media and potential users that the console is too expensive.

This year, that didn't happen. Instead a new controller, the DualShock 3, was announced. The controller answers user's calls for a device with a "rumble" feature, which makes the controller shake at certain points in games. The DualShock 3 will hit Japan in November and be available in Europe and North America in early 2008.

To expand the PlayStation 3 business, Hirai said Sony will begin sharing knowhow built up through its Worldwide Studios unit and will invite game publishers to provide feedback to the company on a periodical basis.

Sony has also acquired two game developers, Evolution Studios Ltd. and its subsidiary Bigbig Studios Ltd. Evolution, which is based in the U.K., is best known for the million-seller "MotorStorm" game, a new version of which is scheduled for release on the PlayStation 3 next year.

Hirai also announced a delay to the "Home" three-dimensional online user community that was due to be released around now. Sony now expects it to be available in early 2008.