It's Official: PS2 is now $199

[Perfect Stu]

Sony Lowers PS2 to $199

SCEA officially announces North American PS2 price reduction.

Sony Computer Entertainment America decided today not to be the follower, but to retain the role of the leader, officially reducing the price of PlayStation 2 from $299 to $199 in North America, the company said in a late night press release Monday. The price drop will take effect immediately.

Amid rumors of a pending Microsoft price reduction for the Xbox -- and after a week of internal discussion and debate, following Microsoft’s price reduction in Europe – SCEA announced a sweeping set of price drops including a price reduction of the PS2 as well as the PS2 8 MB memory card and PS2 Dual Shock controller. The official memory card will retail for $24.99 (down $10 from $34.99), while the Dual Shock from $34.99 to $24.99.

“Our company has always been very aggressive on pricing and we have always looked forward to passing on the manufacturing cost efficiencies to the consumers,” said Molly Smith, SCEA’s director of public relations. “We want to further escalate the accessibility of the PlayStation 2 and to encourage gamers to buy consoles. We don't want pricing to be an inhibitor. With a price point of $199, we will be able to further enhance our business.

As part of an even larger plan, SCEA also announced price reductions of the PS one, the PS one combo, and the PlayStation Dual Shock controller. The PS one will now retail for $49.00 (down from $99); the PS one combo (the portable screen and the PS one units combined) will now retail for $149.00 (down from $199.00), and the PlayStation Dual Shock will now retail for $19.99.

“We are able to lower the price because we have gone through significant pains to modify and make the manufacturing process as efficient as possible for the PS2. The semi-conductor fabrication for PS2s is under the Sony roof so we can control that process a little bit better. At the close of the 2001, Sony became more profitable than we had projected, and we recouped the original investments quicker than we expected. Cracking the 30 million unit mark [shipments made to retailers worldwide] is very significant to us.”

Last week, however, SCEA was singing a different tune. In an interview with SCEA on http://ps2.ign.com/articles/358/358880p1.html”>this very site, a company official was quoted as saying that SCEA was very comfortable with its $299 price point, adding that it didn’t need to drop its price “one iota” in response to the competition. So why the sudden drop to $199? And why now?

“It's more important for us to take the big leap,” said Smith. “And we wanted to make sure that we were doing this for long-term growth. The price point of $299 has served us well. It’s our goal, and it's always been our goal, to reach beyond the core audience to the outskirts of the mass-market audience, and to superceed our own business goals. We are tracking 2.5 to 3 times better sales with PS2 than we were with PlayStation relative to this point in time with PlayStation, and we felt that a $100 reduction was where we needed to be and for the foreseeable future. Also, we didn't really want to distract from E3, which is about the software, not price drops. So it's important to have very constructive meetings with our retailers and partners and plan for the rest of the year.

In related news, Sony Japan announced a very different kind of price reduction for its PlayStation 2 business. SCEJ will reduce the price of PS2s, but using an open-market model, one in which Japanese retailers will openly decide how to price the hardware unit. Retailers will use the model to compete selling PS2s at prices they find affordable, hoping to undercut competing retailers.

“We kind of executing on all fronts and we want to bring this console to biggest market possible,” Smith added. “We want our business partners to sell as many units as possible.”



Alright, everyone on these boards have no excuse now...buy a PS2!!!!!!