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Tech Report – Game On!

Sony’s PS3 price cut and the launch of the PS3 Slim puts them back in the game.

This week, Sony announced the long-awaited price cuts for its PlayStation 3 gaming consoles. Effectively immediately, the 80 gigabyte PS3 will sell for $299 – down from $399 – and the 160 GB model will also drop by $100, to $399. They also announced that a thinner, lighter version of its flagship gaming platform, the PlayStation 3 Slim, will be available September 1, also priced at $299.

The pricing moves by Sony come on the heels of some sobering sales numbers for July. According to market researcher, The NPD Group, total sales of gaming systems tumbled by 37% compared to a year earlier. The Wii sold 252,500 units, the Xbox 360 sold 202,900 units, with the PS3 lagging far behind at 121,800 units.

Gamers have been critical of the PS3’s high price for some time and there have even been rumblings from within the industry. In June, Bobby Kotick, CEO of Activision, publisher of Guitar Hero, Call of Duty and other top-selling titles, called on Sony to drop the price of its console or risk Activision dropping the PS3 for future releases. Since it was first introduced, the PS3 has been significantly more expensive than the Wii or the Xbox 360, and Sony stood on the sidelines as Microsoft dropped the price of the base 360 model to just $199 late last year.

But it’s the pending introduction of the PS3 Slim that has got everyone excited. The new unit is significantly smaller and lighter than the existing version and consumes about 34 per cent less power. But like its older and heavier predecessors, the Slim comes with everything built-in, including a Blu-ray player and Wi-Fi capability.

It’s these last two features that set the Slim apart from the competition. Matt Peckham of PC World put together an interesting pricing chart, comparing the Slim with the various Xbox 360 options once you factor in the bigger hard drive, headsets, HDMI cables, etc. He readily admits that not everyone will want or need to upgrade the Xbox 360, but if you do, the total package could cost you up to $550 compared to $370 for the Slim.

Most industry commentators believe that this won’t be the end of the price wars. With the all-important fourth quarter and holiday buying season just around the corner, look for Microsoft to respond by dropping the price of its Xbox 360 Elite to match Sony and maybe even take it lower. Nintendo could also drop the price of the Wii from $249 to $199, or at least bundle the new Wii Sports Resort or the Wii MotionPlus controller with future sales.

Whatever happens, it’s all good news for the consumer. We’re not just talking about gaming consoles here. The Xbox 360 and PS3 are complete home entertainment systems, with high-definition DVD or Blu-ray capability, and access to thousands of games, movies and TV shows through Xbox Live or the PlayStation Network. All starting at less than $300. Now that’s not bad!


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