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Sony planning PS3 price cut

Lacklustre sales put focus on PlayStation price

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

Sony said today 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 Europe, Japan, North America and Australasia. The company stressed a price cut - which has been predicted for some time - is not imminent, however, meaning it may still be weeks or months away.

Sales of the console have been lacklustre 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 PS3. The PS3 broke sales records in the UK when it first launched, but shipments have since fallen.

Sony has stuck to its launch estimate of shipping 6 million PS3s 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.

Sony 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 PS3. First generation consoles used chips made on a 90-nanometre 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 PS3, 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.

See PC Advisor's PS3 review.


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