Strategy Analytics: Xbox Price Cuts Put New Pressure on Sony's PS3

Business Wire, March 10, 2008

LONDON -- Sony's PS3 games console was today put under renewed pressure by price cuts to Microsoft's Xbox 360 console in Europe, according to industry analysts Strategy Analytics. Microsoft has confirmed that the recommended prices of each of its Xbox 360 console models will be reduced from Thursday this week. The entry level model, the Arcade, is now the cheapest of the current generation of consoles from Microsoft, Sony or Nintendo. The most expensive, the Elite, is now PS40 less expensive than Sony's PS3.

"Sony will be nervous that the PS3's recent sales surge may fizzle out now that the premium Xbox 360 undercuts the PS3 by PS40, and the cheapest Xbox model is almost half the price of a PS3," says David Mercer, Principal Analyst. "Sony will be scrutinising the daily sales reports, but will probably try to hold out until later in the year before making its next price move."

Strategy Analytics also notes that Microsoft's Entertainment and Devices division, which includes Xbox activities, has moved into profit in the last few months. "Microsoft must continue to drive cost out of console manufacturing in order to sustain these improvements in financial performance," notes Mercer.

About Strategy Analytics

Strategy Analytics, Inc. focuses on market opportunities and disruptive forces in the areas of Automotive Electronics and Entertainment, Broadband Connected Home, Mobile & Wireless Intelligent Systems Implementation Strategies and High Frequency Market intelligence. Headquartered in Boston, MA, with offices in the UK, France, Germany, Japan, S. Korea and China, Strategy Analytics works with clients through annual multi-client services, management team workshops and custom consulting engagements. For more information, please visit www.strategyanalytics.com.