Sony reviewing PlayStation 3 pricing

A price cut for Sony's PlayStation 3 games console could be in the cards as the company looks to strengthen the platform and expand its penetration

A price cut for the PlayStation 3 games console may be in the cards as Sony looks to strengthen the platform and expand its penetration.

Sony said Thursday that both pricing and production volumes are under review as it looks to take its next steps now that the third-generation PlayStation has been launched in Japan, North America, Europe and Australasia. The company stressed a price cut is not imminent, however, meaning it may still be weeks or months away.

Sales of the console have been lackluster in some markets due to the popularity of Nintendo's Wii. The rival console, which features wireless motion-sensitive controllers, surprised many by outselling the PlayStation.

Sony has stuck to its launch estimate of shipping 6 million PlayStation 3s before the end of March, which marks the end of its financial year. The company is due to announce its results for the period along with console shipments in mid-May.

On Thursday Sony also said its European PlayStation operations could see layoffs as part of a restructuring.

Up to 160 jobs could be lost at Sony Computer Entertainment Europe, the Nihon Keizai Shimbun newspaper reported, quoting an e-mail message sent to staff on Monday from company President David Reeves.

Sony Computer Entertainment in Tokyo said its European unit is considering the reinforcement and streamlining of its operations to remain competitive, but that no restructuring has taken place yet.

Sony had already been eyeing cost savings from using a more advanced technology to make the Cell processor, which sits at the heart of the machine. First generation consoles used chips made on a 90-nanometer production process, but Sony will switch soon to chips made on a 65-nanometer line. Those chips are 40 percent smaller and thus cheaper to make.

Sony hasn't said when the 65-nanometer Cell will begin appearing in the PlayStation 3, but in mid-March IBM, another of the companies that makes the processor, said it had begun making the more advanced chip.

In January, when Sony announced its third-quarter earnings, Chief Financial Officer Nobuyuki Oneda ruled out the possibility of price cuts for the PS3 in the near future, but hinted it could happen in two or three years' time. That thinking has apparently been revised.

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Martyn Williams

IDG News Service
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