According to Yahoo! Sony to Cut PlayStation 2 Price by $100 Tue May 14, 2:55 PM ET By CHRIS GAITHER The New York Times SAN FRANCISCO, May 13 In a move intended to put the squeeze on its rivals in the video game industry, the Sony Corporation plans to announce on Tuesday that it will cut the price of its popular PlayStation 2 (news - web sites) game console in North America by a third. The $100 price drop, to be announced at Sony's investors' conference in Japan, is sure to send shivers down the backs of Microsoft and Nintendo (news - web sites). The PlayStation 2, which plays DVD's as well as games, will sell for $199 the same price as Nintendo's GameCube, which does not play DVD's, and $100 less than Microsoft's Xbox (news - web sites). Microsoft is trying to win a piece of the $9 billion video game market and has pledged to sell the Xbox, its fledgling console, at competitive prices. Analysts were already expecting a price cut on the Xbox, and they said Sony, by announcing such a steep cut, would probably force Microsoft to lower the price of its console even though it is still losing money on every Xbox it sells for $299. "This thing is designed to send a tsunami right down to Microsoft," said Richard Doherty, an analyst with Envisioneering, a market research firm based in Seaford, N.Y. Sony is also planning to reduce the price of its older console, the original PlayStation, by half, to $49. The moves come in anticipation of the Electronic Entertainment Expo, known as E3, the industry's annual trade show for retailers, which begins in Los Angeles next week. Since the PlayStation 2 entered the market in October 2000, Sony has shipped 30 million of the consoles across the globe, including more than 11 million in North America. Nintendo, the company that created Super Mario and Donkey Kong, has gained a solid footing among younger game players, shipping 12 million of the new GameCubes since March 2001. "This is an extremely aggressive price cut," said P. J. McNealy, an analyst with GartnerG2, a division of the Gartner Inc. research firm. "They're doing it at a time when they have a command position in the U.S." Mr. McNealy said Sony's decision indicated not only that it wanted to squeeze Microsoft's profit margins, but also that Sony was "a little worried" about Microsoft's performance in the United States. The Xbox's struggles in Japan and Europe prompted the fastest price cut in the industry's history, in Europe, but Microsoft has met most analysts' expectations in North America. Microsoft expects to ship 3.5 million to 4 million consoles worldwide by the end of June. But Sony fears no one when it comes to selling video games, said Andrew House, a senior vice president with Sony Computer Entertainment America, Sony's North American games division. "Much of the messages at E3 will be for the race for second place," he said. One theme expected to ripple through E3 is the future of connecting consoles to the Internet so players can compete with opponents in other parts of the world and download new features for games they already own. Nintendo announced today that it would begin selling a $35 kit to hook the GameCube to the Internet through a dial-up or broadband connector. But while the adapters are expected this fall, an executive with Nintendo said the company had no concrete plans to develop games for online playing and would initially count on other publishers. Sega will be the first, with its game Phantasy Star Online, Nintendo said. "Right now, it's a niche business, and we don't do niche very well," said Peter McDougall, executive vice president for sales and marketing for Nintendo of America. And Inside news....Game Cube and XBox cut in 2 weeks.
They are trying to put the squeeze on ms... xbox is dropping to 200 soon though... they make most of their money on the games and accesories for the game console... by reducing the prices they are hoping more people will by the console then buy and the friggin games for it
