E3  
PlayStation 3 boss defends high price
Sony Computer president Kaz Hirai says $499 and $599 game machines are a good value.
By Chris Morris, CNNMoney.com staff writer

LOS ANGELES (CNNMoney.com) While gamers and many industry analysts are still recovering from their surprise at the high price tag for a premium PlayStation 3, the man whose division makes the machine said he doesn't understand the fuss.

"I think when you look at what we put into the box Cell, Blu-Ray, backwards compatibility, the ability to go online - I think it's a very compelling package for consumers," said Kaz Hirai, president and chief executive officer of Sony (Research) Computer Entertainment America. "The totality of what we bring to the table makes it a good value for consumers."

With its highly advanced processor (called the "Cell" chip) and a top-of-the-line Blu-Ray disc player, the PlayStation 3 was bound to be expensive. Standalone Blu-Ray players cost roughly $1,000. But when Sony announced plans Monday to offer two versions of the PS3 for $499 and $599, it set a record for major console launch prices. (Full story)

Gamers were quick to react on message boards.

"My wallet just cried," wrote one gamer, who calls himself 'DingoStoleMyBaby' on Shacknews.com.

Hirai defended the pricing, though, saying "What we're presenting to consumers is future-proofed. It's not going to fall by the wayside."

The decision to offer two versions also surprised many industry observers, who felt Microsoft created some confusion amongst consumers when it took the same approach last November with the Xbox 360.

Hirai said different versions of gaming machines will likely be the norm from here on out, likening it to buying a computer today, where buyers can select from different configuration options to what best suits them.

"We wanted to give the consumers the option to choose what fits their needs," he said.

The two machines do have significant differences. The $599 model offers a 60 GB hard drive. The $499 model has only a 20 GB hard drive and also lacks wi-fi capabilities, a memory card reader and an HDMI output for newer high definition televisions.

No decision has been made on how many of each model will be manufactured.

"We felt that if you want to save something on your Memory Stick, most people have those readers on their PC, which is easily adaptable to the PlayStation 3 with a USB cord," said Hirai. "The only difference is HDMI and at this point, I don't think many people's TV's have that. The ultimate result, to my eyes anyway, is there's not a discernable difference between what you get between HDMI and other forms of high definition."

The lack of an HDMI output could have future ramifications on the system, though.

Some observers have questioned whether Blu-Ray movies will be playable on the PS3 once motion picture companies enable copy protection on the discs.

Hirai said it was "too early to speculate at this point" about such problems.

Sony on Monday vowed it would avoid the supply problems Microsoft (Research) faced with the 360's launch, promising to ship 4 million PS3s worldwide by the end of 2006 and another 2 million by March 31, 2007.

Hirai said he was confident these numbers would be reached, due to the way Sony manufactures the system.

"We have the advantage of manufacturing our own chips," said Hirai. "Most of the PlayStation 3's core components are manufactured in-house. The decision to give the go order comes when we're getting good yields. ... Obviously, the sooner the better, but we're not at the mercy of someone else."

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Sony sees flat TVs bankrolling slow Blu-ray growth - full story hereTop of page

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.