PlayStation 3 Due in Nov., With Hefty Price Tag

After months of silence, Sony named the launch date and price for the PlayStation 3 on Monday, confirming its place as the most expensive game console yet produced.

The full version of the PlayStation 3 will be priced at US$600 in North America and 600 euros (US$763) in Europe. It will first go on sale in Japan on Nov. 11, followed by North America, Europe and Australasia on Nov. 17.

The price is double that of the first PlayStation in 1996 and the PlayStation 2 in 2000. Microsoft’s first Xbox console cost $300, and the Xbox 360, which was launched in November, cost $400.

The announcement caps much speculation about the pricing, sparked when Ken Kutaragi, president of Sony Computer Entertainment, said last year that the machine would be expensive.

There’s a reason for the high price. The console is based on the new Cell processor, which has cost Sony, Toshiba and IBM billions of dollars to develop, and includes an optical disc drive for the new Blu-ray Disc format.

The disc drive will likely cost around $350 per unit and the Cell processor as much as $230 initially, according to an estimate from Merrill Lynch. The brokerage firm estimated the production cost of each console would be as high as $900 to begin with.

Games consoles are typically sold at a loss to drive demand and expand the user base, with profits made on subsequent sales of software. But a larger initial loss means it takes longer to recover the investment.

Sony said last month that it expects its game division to lose 100 billion yen (US$896 million) in the year to March 2007 because of start-up and promotional costs associated with the PlayStation 3. It expects to ship 6 million of the consoles during that period.

The console includes a 60GB hard-disk drive, a memory card reader, a Wi-Fi adapter and a digital high-definition video connector.

Sony will also offer a lower-end version of the console for $499 with a 20GB drive and none of the other features. Both versions will have USB, a Gigabit Ethernet adapter and Bluetooth.

The absence of a high-definition multimedia interface (HDMI) digital video connector with the cheaper console might cause problems for users who want to use the built-in Blu-ray Disc drive to watch HD movies. Movies can be encoded to allow HD playback only through an HDMI connector, so without it, users might have to make do with a standard-definition picture on movies.

Sony also announced a new controller for the PlayStation 3. A mock-up the company has been showing was criticized by gamers, and Sony now says it will offer a wireless Bluetooth controller with a motion-sensing ability that resembles that of the current controller.

-Martyn Williams, IDG News Service

For related news coverage, read Sony Delays First Blu-Ray Disc Titles.

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