Source: The Seattle Times: Business and Technology: Sony raises eyebrows with PlayStation 3 priceSony raises eyebrows with PlayStation 3 price
By Kim Peterson
Seattle Times technology reporter
LOS ANGELES — You'd expect that Sony's upcoming PlayStation 3 console would find a warm reception among the crowds at the Electronics Entertainment Expo, the annual convention of the video-game industry.
After all, these attendees are technology's early adopters who for years have readily plunked down hundreds of dollars for video-game systems and more for all the games to play on them.
But the PS3's hefty price tag is generating some concern even among the avid gamers Sony hopes to target when it debuts the system in North America on Nov. 17. A full bells-and-whistles version will cost $599 and have 60 gigabytes of storage space.
For $100 less, Sony will sell a version with 20 gigabytes. But that version doesn't have wireless Internet capability or compatibility with compact flash memory storage devices.
Because of those limitations, some people at E3 say that if you're going to pay that much money, you might as well pony up the extra $100 for the full package. But some said they weren't going to make the purchase anytime soon.
"It's too much," said Intel application developers Theodore Chilton and Mark Werder, almost in unison, when asked about the price.
"On top of that, you pay 600 bucks and you don't even get a game," Werder added. Both said that they would not immediately buy the console.
"I already have a 360," said Chilton, referring to Microsoft's next-generation Xbox 360 console, which went on sale last November. The Xbox 360 is generally considered to be about as powerful as the PS3, but is priced at $299 and $399. The more expensive version has 20 gigabytes of storage and some extra accessories.
A price tag of $199 or $299 has generally been the norm for video-game consoles at launch. Sony's PlayStation and PlayStation 2 debuted for $299, as did Microsoft's original Xbox.
One reason the PS3's price tag is so high is because it has a Blu-ray player, designed to play movies and games in the high-definition video format considered to be the successor to the DVD. Microsoft is pushing a competing high-definition format, called HD-DVD, but did not include the player as standard in the Xbox 360. It will sell the player as an accessory later this year.
The 2006 Electronics Entertainment Expo
What it is: The annual industry-only conference for the video-game business.
When and where: Conference and workshop sessions run Tuesday-Thursday at the Los Angeles Convention Center. The expo runs Wednesday-Friday.
What happens there: About two-thirds of the 400 exhibitors will show off the games they're preparing to release by the holidays. Retailers will get a sneak preview of the hottest games of the year.
What to expect: The next-generation video-game systems from Sony and Nintendo will be the talk of the show. But increasing attention is directed at mobile gaming; half of the exhibitors will launch a title for a handheld platform.
Who's selling earplugs?: Walking the show floor is like being trapped in a Best Buy for days. There will be 5,800 flat-screen computer and television screens, all blaring at once.
Source: E3Expo
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Kazuo Hirai, the chief executive of Sony Computer Entertainment America, said in an interview Wednesday that the PS3's price was justified because of all its features. Also, he said, consumers will be using the PS3 for the next 10 years.
Still, the PS3 pricing announcement was higher than expected and will be considered a negative for the video-game makers, said P.J. McNealy, an analyst with American Technology Research, in a note to investors this week.
"We believe that the pricing news is not favorable for the video-game publishers," McNealy wrote. "We are concerned about consumer spending levels on software given the high price of the hardware."
Some developers attending E3 said the PS3 was a good deal, especially considering that a Blu-ray player comes standard.
Patrick Lipo, studio creative director for Surreal Software, a Seattle-based subsidiary of Midway Games, said the PS3's price tag was higher than he had expected but not unreasonable. "I think a lot of people are going to pick it up as a Blu-ray player," he said.
Timothy McCaslin, a developer at Aberration Studios, said the technical power and graphics capability are equivalent to some computers that cost three or four times as much.
McCaslin's co-worker, Christopher Lotz, said high-end sound and video support built into the system makes the PS3 more than just a video-gaming machine.
"You can't consider the PS3 as just a game center," he said. "It's an entertainment center."
Kim Peterson: 206-464-2360
$499 & $599 is WAY TOO EXPENSIVE for a console, even if it is at launch. At those prices, an XBox360 or a Wii is looking even more attractive, since those are/will be retailing around $299 (360) and $199 (Wii). Apparently from several of the online articles I've been reading about the PS3, half of the system price alone comes from the BlueRay drive. ::)
I also find this quote by Kazuo Hirai absolutely ridiculous. Seriously, I doubt users will be using it for 10 years. Why? It is because computer technology is advancing at a incredible rate at the moment; the PS3, while having impressive system specs, is already outdated.Kazuo Hirai, the chief executive of Sony Computer Entertainment America, said in an interview Wednesday that the PS3's price was justified because of all its features. Also, he said, consumers will be using the PS3 for the next 10 years
When the specs for PS3 were reveiled last year, they were considered a match for top of the line PCs at the time, but high-end PCs now have faster specs and the gap will widen fairly quickly as time goes by. 10 years in the IT sector is ancient news. Let me give you an example of a 10-year gap in the IT sector:
1996:
CPU: Intel Pentium MMX 100 MHz
Graphics Card: 3Dfx Voodoo 1 8MB
RAM: 32 MB EDO RAM
Operating System: Windows 95
2006 (Now):
CPU: AMD 64 FX-60 2.6 GHz, Dual Core / Intel Core Duo 2.6 GHz
Graphics Card(s): nVIDIA GeForce 7900 GTX 512MB SLi / ATi Radeon X1900 XTX 512 MB Crossfire
RAM: 2 GB DDR/DDR2 SDRAM
Operating System: Windows XP
Note that the 1996 system was considered 'top-of-the-line' back then. Now, if we are to apply Hirai's PS3 logic to the 1996 system, would such a system still be viable in 2006? H4ll no! It is way too slow even for today's standards. Also, Microsoft and Nintendo will just seize on this opportunity in the next couple of years to release a console system that would be much, much faster than a PS3, leaving it in the dust.
Heh, Hirai's statement reminds me of what Bill Gates said in 1981 about total system RAM:
"640k should be enough for anybody." - Bill Gates, 1981
I'm sure his statement will be just as ridiculed as Gates' statement in the next 10 years. :p
