A high-resolution image of the 60GB PS3
SCEA CEO says PS3 price drop still a ways off while Japan sees the cheapest PS3 yet

Along with the Neo Geo and 3DO, the PlayStation 3 is one of the most expensive consoles ever released. While price drops are inevitable during any console’s lifespan, those holding off until a cheaper PS3 rolls around may find themselves waiting longer than expected. As noted by Joystiq, Game Informer magazine interviewed SCEA’s President and CEO Jack Tretton and one of the topics discussed was PS3’s cost.

The magazine asked if the PS3 would see a price drop schedule similar to PS2, which saw a reduction of a third from $299 to $199 just over a year and a half after launch. Tretton replied to the question with a simple “No,” thus leaving the current price points where they are at for at least the rest of 2007.

Tretton reasoned that the enormous R&D costs of the PS3 make it “a lot more difficult to cost reduce” than the PS2. “There's a heck of a lot more under the hood and it costs us more money to make it,” said Tretton. He may be referring to the fact that Sony is selling every one of its new consoles at a loss, making it nearly impossible to move on the price until manufacturing costs are reduced. Analysts currently estimate that Sony is taking a $241 hit on 60GB versions, and a $307 loss on 20GB PS3s.

The Sony executive remained confident in the machine’s price point, saying that the PS3 still represents an excellent value. “I think the consumers that get their hands on a PlayStation 3 clearly see the value and not only want to buy one for $599, in some instances they're willing to pay ridiculous prices to buy one on eBay,” Tretton said.

While Tretton’s words apply specifically to the North American market, the pricing situation is a little different in other territories. The Japanese market received a price-reduced to ¥49,980 ($411) 20GB PS3 before the machine even launched in response to public outcry.

European gamers, who have had to wait for PS3 whether they mind it or not, will be seeing the new console in March at €599 ($777) for the 60GB, and €499 ($648) for the 20GB models – considerably higher than what North Americans and Japanese pay. The UK may get the worst of it all, as the 60GB PS3 will go for £425 ($842) for the 20GB PS3 it will be £350 ($694).

Although Europe may always lag behind the rest of the world for console releases, it may be the first territory to receive a drop in price. With the PS3 selling in Europe at prices much closer to the machine’s manufacturing costs, Sony could have a lot more room to work with. If the PS3 gets a lukewarm – or even cold – reception at launch, it may not be surprising to see adjustments to price or, more likely, the introduction of value-added software bundles.

Going back to Japan, demand for the machine appears to be so low in certain parts of the country that retailers have taken it upon themselves to lower the price. Kotaku reports that sales of the console are so stagnant in Japan that select retailers are taking 20 percent off the price of the 20GB console in hopes to attract buyers. At the sale price of ¥39,980 ($329), Japan has PlayStation 3 at prices that make the rest of the world jealous.

"A lot of people pay zero for the cellphone ... That's what it's worth." -- Apple Chief Operating Officer Timothy Cook
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