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Sunday, July 8, 2007

News : Sony has no plans to cut PS3 price

Sony isn't planning to cut the price of its PlayStation 3 to pep up demand or counter surging sales of Nintendo rival Wii, Sony's president said Friday.

Sony President Ryoji Chubachi also said in an interview that operating profit margin at its mainstay electronics unit, which makes hot-selling Bravia LCD televisions and Cyber-shot digital cameras, is likely to exceed its 4 percent target for the current fiscal year that ends in March 2008.

"At present, we have no plans," Chubachi told Reuters when asked whether Sony had any plans to cut the PS3 price.

Sony has packed cutting-edge technology such as a Blu-ray high-definition optical disc player into the PS3, driving up production costs and making its retail price more than twice as expensive as the Wii.

The higher price tag and lack of attractive software titles have been cited as main reasons the PS3 has been trailing the Wii in sales, and analysts have been widely expecting Sony to soon slash the price to spur demand.

In a Reuters survey of four game analysts this week, three expect Sony to cut PS3 prices by $100 by the end of the year, while one analyst said a cut of $150 is more likely.

The PS3, with a 60GB hard drive, carries a price tag of $599 in the United States, while the Wii sells for about $250.

"If you take a look at how PlayStation and PlayStation 2 have taken off, this is not such an unusual start," Chubachi said.

When the PS2 made its debut in 2000, Sony was initially criticized for lack of strong titles, and some software publishers said the machine was too complex to develop for.

Sony eventually overcame those difficulties and has sold more than 120 million PS2 units, making it the top-selling video game console ever.

In a sign of lack of confidence on the side of investors, however, Sony, which has sales eight times as big as Nintendo, was overtaken by the Kyoto-based company last week in market capitalization and bumped off the list of Japan's 10 most valuable companies.

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