Could a price war be next?


Sony announced late on Monday night that it is lowering the price of its PSOne and PlayStation 2 hardware. Effective immediately, the PlayStation 2 has been slashed to $199 from its original launch price of $299. In addition, the PSOne hardware has been cut as well from $99 down to $49.

Accessories such as controllers and other peripherals, have also come down in price. The PS2 memory card and the Dual Shock 2 controller dropped from $34 to $24 respectively. While the PSOne/LCD screen combo dropped from $199 to $149, and Dual Shock 1 controllers were reduced to $10, previously sold for $19. Kaz Hirai, the president of Sony Computer Entertainment America, stated that the software pricing structure was also being looked at for possible cuts. The average PlayStation 2 game currently retails for $49.99.

Sony said it was making the price cut now, as opposed to September as had been expected by some industry watchers, because it wanted to build momentum at the new discounted price in advance of the year-end holiday season, the make-or-break period for video game sales.

Microsoft's Xbox is currently at its launch price of $299, though analyst speculation says that at Microsoft's E3 press conference, scheduled for May 20, will announce a similar price cut for its hardware. Nintendo's GameCube is still priced at its launch price of $199. This now puts the PlayStation 2 in the same price category as the GameCube.

In early April, a senior Nintendo executive reported that the company would reconsider its GameCube pricing if Sony announced a price cut, especially to the $199 level.