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Sony puts $719 tag on PSX system

It hopes the all-in-one entertainment system, which also has a hard disk drive (HDD) recorder, will boost its electronics division, whose aging product line-up and high costs were a big factor behind a net loss of almost $1 billion in the January-March quarter.

“There is the game industry and game development and we are trying to fuse the consumer electronics business with games to make a new growth area,” Sony Chief Executive Nobuyuki Idei told Reuters at a technology industry show in Makuhari, near Tokyo.

The fusion of games and mainstream electronics products took another step forward on Tuesday when Nokia  , the world’s leading mobile phone maker, launched its new combined cellphone and game machine, N-Gage.

Sony is scheduled to enter the portable game machine market next year with its PSP device, which will also play music and movies.

The PlayStation 2 (PS2) and Microsoft’s  Xbox console already come with a built-in DVD player, but Sony aims to justify the hefty price by including a top-of-the-line HDD recorder.

A version with a 160-gigabyte HDD will sell for 79,800 yen and be able to record up to 204 hours of television, the company said. It will also sell a 250-gigabyte version for 99,800 yen. There is no timetable for an overseas PSX launch, Sony said.

CHEAP?

“The price was in line with our expectations and it is likely to have a solid appeal for buyers of DVD recorders,” said Masahiro Ono, a senior analyst at Credit Suisse First Boston.

As a comparison, Sony will also start selling a DVD recorder with a 160-gigabyte HDD in November at a retail price of around 100,000 yen. Rival Pioneer Corp plans to begin offering a similar DVD recorder the same month for around 140,000 yen.

“PSX’s price sounds very cheap,” a Pioneer spokeswoman said. “But we have to look closely at the PSX as it may lack some of the functions on our product. We can’t compare the two just because their HDDs are the same size.”

Tadanobu Kawano, a 26-year-old game fan in Wakayama prefecture, said: “It sounds cheap, especially since it’s Sony’s. But whether I will buy it or not may depend on the design.”

Kawano already has Sony’s PlayStation and PlayStation2 as well as Nintendo Co Ltd’s  GameCube console and Microsoft Corp Xbox.

Credit Suisse First Boston’s Ono estimated the cost of making a 160-gigabyte PSX at 70,000 yen, excluding promotion and marketing. The price would bring Sony “some profits,” he said.

INVESTING FOR PS3?

Since the PSX does not offer any different game features from the PS2, some customers said they would prefer to wait for a new PlayStation model.

“I can’t see much use in paying this much for the PSX when PS3 is coming,” said Koji Nishikawa, a 36-year old graphic designer at the industry show.

Sony has not offered any clues on when a new game machine, which many presume will be a “PlayStation 3,” will make its debut.

Sony plans to invest 500 billion yen over the next three years in semiconductors, including research and development for a high-powered microprocessor codenamed “cell” that is being developed with Toshiba Corp  and IBM .

Analysts expect the chip to power Sony’s next-generation game console, but the company aims to make “cell” the global standard for consumer electronics in the high-speed Internet era.

The company’s games division has developed cutting-edge semiconductors for the PS2 and the original PlayStation, but it is the upcoming PlayStation machine that has people excited about the integration of electronics and games.

Sony has invested 300 billion yen since 1999 on microchips for the PS2 and its game division head Ken Kutaragi has said it plans to recoup its initial investments in the game machine’s “emotion engine” and graphic chip this year.

Source: Reuters