A lull in US games sales has triggered a console price war, with Sony launching its second generation, thin and elegant PlayStation 3 for delivery next month at around $100 less than its current range.
In the heyday of its PS2, Sony used to control both pricing of all consoles and also dictate to the two other majors, Microsoft and Nintendo, just when they had to bring down their console prices. It was this market control that made it impossible for Microsoft to make money on the Xbox.
In the current generation Sony’s PS3 made the colossal sacrifice of both carrying the Blu-ray battle to its pro-Sony conclusion, and also for bringing a brand new, untried, supercomputer class chipset to market. Between them these two initiatives meant that Sony lost focus on just what gaming was about, and ended up with Microsoft getting a year’s lead on it in the HD video gaming market and allowing Nintendo to steal a march in gaming generally, with a far smaller, less powerful, but better designed console, from a family gaming point of view.
But as we get close to that all important $200 price mark for consoles, all the families all over the world which grew up on the PS2, can finally start to replace them and join the PS3 generation. Initially, at $600 when launched three years ago, the PS3 was the console everyone wanted, but which no-one could afford. Now that Sony has crashed the price to $299 (and it will now continue to go down) it will begin to reverse recent tends in the US, which have seen it third placed yet again, behind the Nintendo Wii and the Xbox 360, after long periods of it being more popular than the Xbox 360 and only slightly behind the Wii. Around the rest of the world the PS3 has continued to outsell the Xbox and the respective installed populations are around 24 million for the PS3 and 30 million for the Xbox 360, after a year’s start.
The new PS3 comes with a slightly bigger hard drive at 120 GB, a new streamlined form factor and will hit stores almost everywhere on September 1 at a retail price of $299 in the US, €299 in Europe and £249 in the UK. The system will be launched in Japan on September 3. The existing PS3 systems will be priced at $299 from now to clear.
The internal design architecture of the new PS3 system, from the main semiconductors and power supply unit to the cooling mechanism, has been completely redesigned, achieving a much slimmer and lighter body. Power consumption is also cut and it has a reduced fan noise.
All of this was launched at the Gamescom show in Germany this week, when Sony finally brought its PlayStation Network movie service to Europe and announced that a version of the BBC iPlayer will be developed for the PS3 rather than being simply access through its browser. The PlayStation Network in the UK and Europe will now offer about 15,000 movies for rental or purchase on the PlayStation 3, transferable to the PSP.
But there continue to be some differences in the content that is available between Europe and the US. For instance the PS3 currently has DVR software available for it in Europe, which means that users can store video from the TV for later viewing, and even for placeshifting to a PSP screen over the internet. This feature, for some reason, has never been launched in the US.
New games promised at the show include Uncharted 2: Among Thieves, EyePet, Ratchet & Clank Future: A Crack in Time, Heavy Rain, God of War 3, MAG, ModNation Racer and Gran Turismo 5
Sony also announced a new version of the PS3 software, with the addition of a ‘What’s New’ screen, for browsing additions to the store more easily, a Bravia Sync feature which imposes a media cross bar on the TV screen which can be used with the TV remote, and a new vertical stand for the console.
This well timed attack by Sony comes as games and consoles sales are falling, according to a report out this week from NPD in the US.
US video game sales were down in July, by 14% from this time last year, their fifth month of decline, to just $848.9 million. Hardware sales are down a huge 37% with the Nintendo’s Wii still leading with sales of 252,500 units in July; 202,900 Xbox 360 units and only 121,800 PlayStation 3 units. Those figures are all down except for the Xbox sales, which are flat. The handheld Nintendo DS led all hardware sales with 538,900 units.
Against this backdrop it is perfect timing for Sony to make a bid to re-take control of the console market, and after its June refresh of the PlayStationPortable, with its now PSPgo available in October, a move whereby it also got rid of the failed UMD mini DVD format, Sony is heading for Christmas with a brand new, and much improved, line up.