The price of the PlayStation Portable will drop by $30, Sony has noted, in the first price cut for the gaming device since it debuted in March 2005. Usually priced at $199.99, the PSP will now retail for $169.99, in a bid to outpace rivals such as Nintendo's Game Boy.
The move comes soon after Sony's gaming unit reported a third-quarter $443 million operating loss related primarily to the costs involved with putting out the PlayStation 3 game console.
The PlayStation 3's high-end components forced Sony to put a hefty price tag on the console. Consumers who wanted less expensive gaming consoles tended to turn to Microsoft's Xbox or the Nintendo Wii, driving sales for those systems.
Gaming on the Go
Much as it does in the console arena, Sony is competing most directly with Nintendo for adoption of the PlayStation Portable over the Game Boy and Nintendo's other portable system, the DS.
Although the DS is nearly three years old, sales are still going strong, according to recent research from NPD Group. In February, Nintendo's DS outsold every other console in the U.S., with about 485,000 total units sold. The prices of the DS vary among online and brick-and-mortar retailers, but a consumer can usually expect to pay from $130 to $160.
Sony has seen a steady rise in the number of teenagers adopting the PlayStation Portable as their primary handheld entertainment system, said Jack Tretton, chief executive of Sony Computer Entertainment America, in a statement. The company expects that the new price will accelerate that trend.
The PlayStation Portable Entertainment Pack will also be sporting a lower price, to $200, and Sony will launch an extensive advertising campaign to publicize the reduced cost, directed primarily at teenage gamers.
Ongoing Gaming Wars
Although the race to get more customers to adopt the PS3, PSP, Wii, and Xbox 360 has been widely discussed over the past few months, the console and portable gaming competition is really more like a marathon than a sprint.
Users can expect to see many moves such as price changes, game development announcements, and new service offerings, said Forrester Research analyst Paul Jackson.
"In general, we're seeing Nintendo gain an initial lead in terms of hardware sales, but you have to remember that this is very much the early days for all of this," he said. "It's difficult to predict who's going to have the best foothold a few years from now."
Factors that could tip the balance from one device to another include more compelling games, better services like online play, and faster processing speeds, Jackson added.