September 26, 2001 12:15 PM PDT

Sony stands firm on U.S. PlayStation price

Sony will not discount its PlayStation 2 video game console in the United States this year, despite looming competition and price cuts in Europe and Japan.

Sony Europe announced Wednesday that as of Friday, the European version of the console will sell for about $290 (199 pounds), down from the original price of $440. In June, Sony cut the price of the PlayStation 2 in Japan from around $320 to $280.

But the PS2 will remain at $299 in North America for now, a spokeswoman for Sony Computer Entertainment America said Wednesday.

"We're holding firm to the assertion made earlier in the year and one also made to our business partners that we will not be reducing the price of the PS2 in North America...at least for the course of this year," spokeswoman Molly Smith said.

"We've never been a company that makes decisions based on the competitive landscape," Smith added. "And we are not going to be competing this year, or even necessarily next year, for the same kind of customer as Nintendo and Microsoft."

Many analysts had expected Sony to cut the U.S. price of its game console next month to deal with competition from rival Nintendo and newcomer Microsoft. Nintendo will launch its new GameCube system Nov. 18, three days after Microsoft enters the market with its Xbox.

But with Microsoft wavering on how many units it can get to stores at the outset and Nintendo unable to deliver extra units, the PlayStation 2 may be the only game console left on store shelves when consumers make holiday buying decisions, analysts say. With that prospect, Sony doesn't need to cut prices to stay in the game.

"If the GameCube and Xbox sell out immediately and people still want to buy a console, they're going to grab a PS2," IDC analyst Schelley Olhava said.

Sega, for example, enjoyed a boost in sales of its now-defunct Dreamcast console late last year, when demand for the then-new PS2 far outstripped Sony's limited supplies.

"Dreamcast got quite a kick (from) the PS2 launch, and history could well repeat itself," said Richard Doherty, president of research company The Envisioneering Group. "We don't think there'll be enough GameCubes for consumers this holiday season. And historically, when that happens, a number of consumers go out and buy another system."

If and when Sony does decide a price cut is in order, Doherty said, the company is unlikely to give any advance warning.

"Sony can bide its time. And if they decide they need to do that, they just tell retailers in a midnight message that it's now a $250 system," he said.

One unknown factor hovering over sales forecasts is the aftermath of the recent terrorist attacks, Doherty said. Nintendo, with a family-friendly catalog of games based on characters such as Mario Bros. and Pokemon, may benefit as parents steer clear of video game mayhem, he speculated.

"We're still studying this, but the indication is that a lot of families in the wake of the World Trade Center attacks are not going to want their kids to be playing violent games, which is a lot of what you find on PS2 and Xbox," he said.

 

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