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Sony, Microsoft And Nintendo Slash Console Prices

5/20/2002 02:59:00 PM Eastern

Los Angeles - Los Angeles -Nintendo the price of its Gamecube by $50 yesterday, joining Sony Computer Entertainment and Microsoft which had slashed their game consoles by $100 late last week.

The Gamecube is now $149 with Sony PlayStation2 and Microsoft Xbox at $199, Sony also dropped the sticker on the PlayStation One console is to $49.

Sony went a step further by announcing a 50 percent price cut on the PlayStation One console and a reduced price for its memory cards and controllers (now $24.99 each), as well as the PlayStation One LCD bundle ($149.99). The company was also said to be considering price reductions on certain software titles.

Sony's moves appeared to be a pre-emptive strike against Microsoft, which as widely expected announced its own $100 price cut on the Xbox console two days later.

Microsoft called its price cut 'a carefully planned effort that included the participation of key retailers and third-party publishers.'

Microsoft said it has begun to support its price move with a multimillion dollar national merchandising and marketing campaign.

'As part of our long-term strategy to broaden the reach of Xbox and make it accessible to more consumers, we've been working for several weeks with our key partners to make this announcement as seamless and high impact as possible,' said John O'Rourke, Microsoft Xbox worldwide marketing director.

Microsoft is positioning Xbox as 'the best value among all competing video game systems,' in part because it incorporates a hard disk drive and ethernet port, which are options for the Playstation2.

Microsoft said that in its six months on the market, Xbox has generated a 4.1 software attach rate in North America, and expects to ship 3.5 million to 4 million consoles for the fiscal year ending June 30, 2002.

In early May, Sony announced it had sold more than 30 million PlayStation 2 units worldwide, which is almost 10 times the installed base of Microsoft's Xbox.

As this went to press, Sony was expected to have a range of additional announcements planned for E3, including August shipping plans for a network adapter for the Playstation 2 that will bring online game play to the popular console.

Sony also outlined a plan to make the PlayStation 2 the centerpiece in a new home networking initiative. To advance that strategy, Sony said it has established a new company called the Network Application and Content Service Sector, which is charged with linking Sony's three main businesses - electronics, gaming and entertainment.

The goal of the new company is to develop a 'broadband network society,' made up of homes that are filled with Sony electronics components that link with each other and the Internet.

Sony is also planning to announce an expanded online gaming initiative at the show.