PlayStation 3 prices: $499 and $599
New gaming system will go on sale in U.S. on Nov. 17 with two hard-drive sizes, mimics Nintendo controller
By Chris Morris, CNNMoney.com staff writer

LOS ANGELES (CNNMoney.com) - When the PlayStation 3 launches in the United States on Nov. 17, it will carry the highest price of any major console launch.

Sony announced plans Monday to offer two packages when the system goes on sale this fall. A PS3 with a 20 GB hard drive will cost consumers $499. Those wanting a larger, 60 GB hard drive will pay $599. The $499 version will also lack several features found in the more expensive one.

The PS3 will be $200 and $300 higher than the launch price of the PlayStation 2 six years ago. It's $100 higher than the current retail price of Microsoft's (Research) Xbox 360.

European gamers will pay 499 and 599 for the two packages.

Gamers were quick to react on message boards, protesting the high price. "My wallet just cried," wrote "DingoStoleMyBaby," a member of Shacknews.com.

Sony (Research) also revealed a key feature of its new controller, showing a functionality that appears very similar to the one Nintendo will offer with the Wii, its new system.

While the controller looks virtually identical to the current PS2 controller, user wrist movements can also be translated into onscreen movement - "but it's based upon our industry standard controller, which has been enjoyed by so many gamers," said Phil Harrison, president of Sony Computer Entertainment Worldwide Studios.

Nintendo shrugged off the similarities, with a spokesperson saying "imitation is the sincerest form of flattery".

The $499 price had been widely speculated, but industry observers were surprised with Sony's decision to offer two packages - as well as with the $599 price.

"At least Sony's giving people advance notice on how much they're going to need to save up," said P.J. McNealy, an analyst for American Technology Research. "I think some people are going to find $599 intimidating - maybe not early adopters, but definitely the mainstream audience."

Sony said it is taking steps to avoid the widespread shortages consumers faced last holiday with the Xbox 360. The company plans to ship 2 million PlayStation 3s at launch and plans to ship another 2 million before the end of 2006. Kaz Hirai, president and CEO of Sony Computer Entertainment America, said the company also plans to ship an additional 2 million units in the first quarter of 2007.

"The next generation doesn't start until we say it does," said Hirai.

While Sony is offering two pricing options for consumers, the more expensive machine is much more feature rich and likely the default choice for gamers who can afford it. This is somewhat similar to Microsoft's launch of the Xbox 360, where the more expensive $399 machine actually proved to be the better bargain.

Although Sony did not note these changes in its pre-E3 press conference, printed material handed out by the company indicate that in addition to having a smaller hard drive, the $499 PS3 will not be able to read data from Sony memory sticks, SD or compact flash cards (a feature Sony touted Monday evening). Nor will it offer 802.11 b/g wireless compatibility. And perhaps most importantly to owners of newer high definition television sets, the $499 PS3 will not have an HDMI output.

Sony said many of the features which were removed from the less expensive version could be found on many home computers and it was relying on the assumption that buyers would be able to use those through their home networks.

"It's a computer system," said spokesperson Kim Otzman. "It can be expanded using adapters on the market."

In addition to revealing the system's price and launch date, Sony showcased more than a dozen titles for the PS3, mixing familiar franchises such as "Tekken" and Electronic Arts (Research)' "NBA Live" with new ones, such as "Heavenly Sword," which bears a striking resemblance to the company's own "God of War" franchise.

The PlayStation 3 is powered by the "Cell" processor, which Sony boasts makes the machine 35 times more powerful than the PlayStation 2. It will support Blu-Ray storage devices, which hold significantly more data than today's DVDs, as well as seven wireless controllers, and has outputs for two high-definition televisions (HDTVs). The PS3 will also offer a free online network.

Sony was the first of the three console manufacturers to speak before the beginning of the Electronic Entertainment Expo, the annual trade show of the computer gaming industry. Nintendo and Microsoft both have press conferences scheduled Tuesday.

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