Sony lowers PSP Prices

Sony Computer Entertainment America said Tuesday it will cut the price of its PlayStation Portable gaming device by 15% to US$169.99 in an effort to attract younger players and win sales from Nintendo Co.'s DS handheld player.

"We have recently seen a steady rise in the number of teens adopting PSP as their primary handheld entertainment system, and we expect the new price will accelerate that trend," said Jack Tretton, SCEA president and chief executive.

The PSP Core System, which will receive a $30 price drop effective Tuesday, April 3, will be marked down from $199.99 to $169.99, in order to capture a larger share of handheld market, for long dominated by Nintendo.

With the price cut move intended to boost sales among young handheld users Sony is hoping to deepen its market penetration side by side with Nintendo DS, a handheld game console that features a clamshell design, with two LCD screens inside, one of which is a touch-sensitive screen, and Nokia's N-Gage, a mobile telephone and handheld game system based on the Nokia Series 60 platform..

Sony Corp., the world's biggest maker of video-game consoles, has sold 7 million PSPs in the U.S., while Nintendo has sold the 9.9 million DS units, according to market researcher NPD Group Inc. The PSP was introduced in the U.S. in March 2005.

Nintendo DS outsold every other console in the United States in February, registering 485,000 units sold, according to NPD Group.

After attaining the top position in January, Nintendo continued with its numero uno position among the trio of next generation gaming consoles in sales after selling 355,000 Wii video game consoles in February, outshining both its rivals Microsoft’s Xbox 360 and Sony’s PlayStation 3 in the US video game consoles market. Sony’s 7-year-old PlayStation 2 was the second best-selling console in February after selling 295,000 units. US gamers bought 127,000 PS3 consoles and 228,000 Xbox 360 units in February.

In August 2005, Nintendo reduced the price of the DS player, first released in 2004, from $149.99 to $129.99. Whereas the average PSP owner is 24 years old, the DS owners tend to be children and young teens, Tretton informed. Released on October 7, 2003, the N-Gage game deck retails for $299.99.

Sony’s move to attract young male gamers with a lower priced handheld game system comes two months after Sony's gaming division posted a third-quarter operating loss of $443 million, largely due to the considerable high costs for the launch of its PS3 video game console.

This is the first time Sony has officially reduced the suggested retail prices on the PSP, apparently because video game publishers and financial analysts have been urging Sony to slash hardware prices in recent quarters.

Sony is slated to launch new games for younger and casual players. The 2007 game releases lineup that will compliment Sony’s "Greatest Hits" library includes “Ratchet & Clank: Size Matters,” about a space-age mechanic who teams up with a robot to save the galaxy from an evil ruler, "Daxter", "Syphon Filter: Dark Mirror", "SOCOM: U.S. Navy SEALs," and "God of War".

"We have always been passionate about making great entertainment accessible to everyone, and the new price for PSP, as well as the continued growth of the "Greatest Hits" library, reflect our ongoing commitment to supporting and expanding the PSP community," said Tretton.

In 2006, PSP shipments rose to 25 million units worldwide, with hardware and games accounting for about $3 billion in sales, while the software shipments increased to more than 90 million units last year, as per Sony’s figures. More than one million new PSP systems were sold in North America in December alone.