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Sony to phase out cut-price PS3 to remain in Comptetion
Sony is to phase out the 60-gigabyte model of its struggling PlayStation 3 console, a move announced only days after it cut the price of the machine from $599 to $499 (£244) in the United States.The decision to scrap the 60-gigabyte model led angry gamers to dismiss the price cut as a “clearance sale”, designed to clear unwanted inventory and not to improve value.
Sony said that it had a supply of “several months” in stock. It is estimated to be losing about $200 on each PS3 sold.
The move will mean that only the newly revealed 80-gigabyte, which retails for $599, will be on sale in the US, raising questions over Sony’s seemingly volatile pricing strategy.
Joystik.com, the gaming blog, said: “Anger, frustration, confusion, denial, shock … these are all words that can be used to describe the emotional state felt by the gamer community after Sony went from officially announcing a price drop … to essentially making it all a moot point.”
The Japanese technology giant and its chief executive, Sir Howard Stringer, are under intense pressure to close the huge sales gap with Nintendo’s much cheaper Wii.
Sony has sold 1.4 million PS3’s in the US since its launch last November, compared with 2.8 million for the Wii.
Last week’s price cut had placed the 60-gigabyte PS3 firmly in the same bracket as Microsoft’s Xbox 360 — the third player in the console sector — and led to expectations of a price war.
However, only days before its announcement, Ryoji Chubachi, the Sony president, had said that there were “no immediate plans” for such a move, despite the PS3’s relatively high price — about £400 in the UK — being cited as one of its key disadvantages against Nintendo’s Wii, which retails for less than half that.
Meanwhile, Sony has since risked the ire of European gamers by saying that it has no plans to cut the 60-gigabyte PS3 in territories including the UK, despite the US discount.
Customers across Europe will instead be offered a “starter pack” that includes two free games and two controllers, which Sony says is worth £115.
Although selling hardware at a loss to stoke demand for higher-margin game software has been a common tactic in the gaming sector, there have been signs that the industry’s economics are changing.
Nintendo’s market leading Wii, which is outselling the PS3 by a margin of at least 2-1, is already profitable, the company told The Times last week.
Last week, on the eve of E3, the gaming industry’s largest convention, Sony said that it would launch the 80-gigabyte PS3, which will come with MotorStorm, a racing game, in August.
It will compete with Microsoft’s Xbox Elite, which has a 120-gigabyte hard drive and went on sale in the US this year for $480.
Despite its larger hard drive, the Microsoft machine does not have the PS3’s next-generation Blu-ray DVD player.
UPDATE : Officially confirmed read here for details
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