Price of game consoles dropped

By PETER GRIFFIN IT writer

The video game price war intensifies today with Sony dropping the price of its Playstation 2 gaming console by 20 per cent to $399, a move Microsoft is expected to immediately follow.

The intense rivalry between Sony and Microsoft will deliver attractive deals to New Zealand consumers who resisted the massive marketing splurges from the gaming giants in the run-up to Christmas and held onto their $500.

It follows smaller price drops last week for the US and Canadian markets for Playstation 2 and Xbox (from US$199 to US$179). Sony appears to be clearing the decks of its existing PS2 model ahead of the launch mid-year of an improved version that will feature design improvements and bundle in a network adapter for internet game play, a device that was previously sold separately.

Sony Computer Entertainment's New Zealand managing director, Steve Dykes, said the Japanese electronics maker had "pretty aggressive" sales targets this year, with price and availability of game titles the big drivers of consumer demand.

But he denied the price drop was designed to clear out stocks of the existing PS2 before the new model arrived here.

"This is not about clearing out old stock. This is much bigger than a running change to a console. Yes we'll be introducing that console at some stage, but we've not yet advised of when we'll be doing that."

Just back from the gaming industry's major event, the E3 show in Los Angeles, Xbox's marketing manager Wilf Robinson said he was unsuprised at the move given the retail price in the Australian market was already at A$399.

"A $100 difference doesn't really stack up given the exchange rates at the moment," he said.

Microsoft was holding a meeting today to determine if the price of Xbox would be cut.

"We always said it was going to be a battle, we never expected Sony would make it easy for us," added Robinson.

In January, Microsoft said it had sold 20,000 Xbox consoles since launching locally in October. A good pre-Christmas selling season contributed to the result. Robinson had not say how many consoles had been sold in the period since

"The first two months of the year are always seasonably bad for the industry and we've budgeted for that."

But, he said, sales had improved in March and April. Microsoft had begun selling Xbox in The Warehouse stores.

In the key US market, the Xbox is understood to trail Sony in sales five million Xboxes to Sony's 19 million PS2 consoles.

But the gaming market is huge, now worth more than the music industry.

Robinson said the falling price of consoles was also making them attractive buys for consumers in the market for DVD players.

In November, Microsoft would release Music Mixer to Xbox, a US$40 add-on that turns the console into a karaoke machine, where mp3 audio files can be played back with the vocals stripped out. Xbox owners would also be albe to store photos on the Xbox hard drive, displaying them on TV screens in a slide show.