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Friday, 28 September, 2001, 13:19 GMT 14:19 UK
Sony fuels games price war
PlayStation 2
The Playstation 2: 'Unmitigated success'
Sony's decision to reduce the price of its Playstation 2 video game console was prompted by increased profits rather than concerns over mounting competition, the firm said.

The company announced on 28 September it was dropping the retail price of its console by 26% in Europe and Australia to the equivalent of 199 in the UK.

A statement for Sony said the move had been possible because of "substantial savings" in production costs and improved technology.

Playstation 2 was launched in November 2000 and has since been fighting to keep its place at the top of the games market with increasing pressure from Microsoft and Nintendo.


Sony stated at the time of launch, that its strategy would be to pass on any future savings to its customers, and this is exactly what we are doing now

Ray Maguire, Sony UK Managing Director

But in a statement, Sony said: "Significant advances in manufacturing have produced increased efficiencies.

"A brand new production plant has become operational in Japan, creating further economies of scale.

"These factors combined mean that these substantial savings can be passed straight to our customers."

Company spokesman David Wilson added that buoyant sales figures for Playstation 2 were also being passed back to the customer.

"Our sales are three and a half times those of the original Playstation worldwide," said Mr Wilson.

'Strategy'

Ray Maguire, Managing Director of Sony UK, described Playstation 2 as an "unmitigated success".

Mr Maguire added: "Sony stated at the time of launch, that its strategy would be to pass on any future savings to its customers, and this is exactly what we are doing now."

Playstation 2 was introduced in Britain on 24 November at the cost of 299 ($439.5) and boasting a range of more than 100 software titles.

The price was cut in June to 269 after criticism from consumer groups that the price was too high compared with the US and Japan.

Rivals

But the Sony machine is facing tough competition from powerful new games consoles about to hit the global market.

In particular, Nintendo is in the roll-out period for its new GameCube.

Nintendo's GameCube
Nintendo's GameCube could be a major rival

Nintendo has just launched GameCube in Japan ahead of its arrival in the US in November and Europe next year.

Then there is Microsoft, which is set to make its debut on the games market with its highly anticipated X-box.

Mr Wilson said the Playstation price-cut was not primarily a move to pre-empt competition from these two products, particularly ahead of the Christmas sales period.

However he conceded that Sony's aim was always to remain "competitive".

Figures released by the company on Friday said that, to date, 17 million Playstation 2 units had been shipped worldwide.

Sony said this made Playstation 2 "one of the most successful consumer electronic product launches in history".

See also:

16 May 01 | New Media
Console wars at E3 show
29 Mar 01 | Business
Microsoft's X-Box goes online
16 May 01 | New Media
Excitement over X-Box
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