Sony Drops Price of PlayStation Portable 15% - InformationWeek

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Sony Drops Price of PlayStation Portable 15%

After two years on the market, Sony hopes to goose sales on its handheld gaming device.

Sony on Tuesday dropped the base price of its PlayStation Portable by 15%, a move that at least one analyst said was not related to the better-selling and less expensive Nintendo DS Lite.

The drop to $169 applies only to North America, Sony said. Pricing in other regions, such as Europe and Asia, remains the same. The discounted PSP applies to the Core Pack, which includes the hardware, AC adapter, and battery.

Even with the price cut, the PSP is still more expensive than the Nintendo DS Lite, which starts at $130. Of the two handheld game platforms, DS Lite has sold better in the United States, 9.9 million versus 7 million, according to The NPD Group, but the products are significantly different. The PSP has better graphics and more processing power and is a multifunction device that can surf the Web; play movies, music, and games; and can be used to store and view photos.

Rather than an example of Sony chasing Nintendo, the price drop reflects the gaming industry norm of price drops the longer hardware stays on the market. PSP launched about two years ago.

"It's not at all unusual for hardware systems to come down in price over time," Anita Frazier, analyst for The NPD Group, said in a statement. "Since the PSP has been in the market for two years, this is a natural evolution of pricing strategy to move beyond the early adopter consumer to even larger segments that may be more price sensitive."

With Father's Day and graduation closing in, it makes sense for Sony to drop prices now to attract gift givers, a spokesman for the research firm told InformationWeek.

Outside of the handheld realm, Sony competes with Nintendo and Microsoft in the videogame console market. The Sony PlayStation 3, launched in November, is also more expensive that its rivals' products. The Nintendo Wii, which was introduced about the same time, has outsold Sony's higher-end machine. Microsoft introduced the latest version of the Xbox about a year before its competitors.

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