Underlining its faith in the video-game business as an engine for growth, Sony Corp. slashed the price of the PlayStation 2 console in the United States Tuesday to $199, underpricing its biggest rival, Microsoft Corp.’s Xbox, by $100.
The price cut was part of a business plan outlined Tuesday by the Tokyo electronics and entertainment giant. Sony’s PlayStation 2, which has now sold more than 30 million worldwide, had been selling in the United States for $299, the same as the Xbox.
Under a strategy for the fiscal year that began last month, Sony hopes to turn around its sluggish electronics sector by connecting more products with its game and entertainment businesses as people increasingly use gadgets as network-linking tools.
Note: Microsoft XBOX has reduced their price to $199 however Gamecube is staying at the same priceSony set up a new company called Network Application and Content Service Sector that will work as a bridge over its three “core” businesses – electronics, games and entertainment.
YourZip Code: Go The new company will work on creating strategic links in services that bring the three areas together and come up with new services and products for what Sony envisions as the “broadband network society” – homes filled with Sony gadgets such as TVs, mobile phones and personal computers that link not only with each other but also to the Internet.
To pull it off, Sony is banking on its movies, encouraged by the refreshing box-office success of “Spider-Man” after years of putting out flops. The film has received positive reviews since it started showing earlier this month and is virtually assured of becoming one of the top-grossing movies ever.
“It’s been ‘Spider-Man’ everywhere,” chief executive Nobuyuki Idei said at a news conference at a Tokyo hotel. “Our aim is to have Sony recognized as a company with three core sectors – electronics, games and content.”
If all works out as Sony hopes, people will be using Vaio computers to link up gadgets to download music by Sony performers such as Jennifer Lopez, view previews for Sony films on Sony mobile phones and watching Sony Pictures DVDs on huge Sony “home theater” TVs.
PlayStation 2 will be a key Net-linking machine as online games and other downloads become available later this year in Japan, Sony said. Sony has not said when such services for the PlayStation 2 will be available in the United States.
Ken Kutaragi, president of Sony Computer Entertainment said PlayStation 2 controls 82 percent of the market, soundly beating its rivals, the Xbox and Nintendo’s GameCube.
Microsoft has said 1.5 million Xbox consoles have been sold and it plans to ship 3.5 million or 4 million by June. Microsoft recently lowered the price of the Xbox by about a third in Europe but has kept its price in Japan and the United States unchanged. Xbox sells for $270 in Japan.
“There are no plans now to lower the Xbox price. But as a strategy, lower prices are always a possibility,” said Midori Takahashi, Microsoft spokeswoman in Tokyo.
Nintendo, which makes the Mario and Pokemon games, also denied any plans to cut prices. “No chance at all,” said Yasuhiro Minagawa, Nintendo spokesman in Kyoto.
Game Cube, which went on sale in the United States in November, sells for $199 and has sold about 4 million worldwide so far.
Sony officials acknowledged the company went through hard times in the fiscal year that ended in March because of the global electronics slump. But the worst is over, they said, as Sony moves forward in a new stage in the broadband era developing over the next few years.
At a time when other major Japanese electronics makers posted huge losses, Sony came out fairly unscathed, aided by its video-game and entertainment businesses. For fiscal 2001, Sony posted a net income of 15.3 billion yen ($119 million), down 9 percent from the previous year.