ABI Research: Consumers Unwilling To Pay PS3 Price?

According to an E3 summary report by analyst firm ABI Research, consumers may not be willing to pay the premium prime being asked by Sony for its upcoming PlayStation 3, ...
According to an E3 summary report by analyst firm ABI Research, consumers may not be willing to pay the premium prime being asked by Sony for its upcoming PlayStation 3, despite its inclusion of a Blu-ray drive and other cutting edge technologies. The report calls Sony's pricing strategy risky, and one that could eventually undermine the company's stride for first place in the next-generation console market. "Asking consumers to pay $500 to $600 for a game console, when most have yet to purchase an HDTV, will give many current PlayStation 2 owners reason to consider the competition," said Michael Wolf, principal analyst with ABI Research's broadband and multimedia research practice. "Sony has clearly hamstrung itself with a box that is expensive to manufacture, and these costs are driving a retail pricing strategy that places a high financial burden on the consumer." During last week's E3 event in Los Angeles, Sony's Kaz Hirai defended the $499 and $599 dual price point for Sony's PlayStation 3 launch to financial website CNN Money, describing the pricing as "a good value for consumers." ABI Research feels Nintendo had the best showing at E3, and that of the three companies introducing next-generation console hardware to the market, Nintendo is the “best positioned” to widen its gaming audience by attracting casual gamers with titles such as Wii Sports, a collection of sports games that take advantage of the Wii's unique remote, and WarioWare: Smooth Moves, the latest sequel in the company's microgame-based franchise. The firm also states that Microsoft's unveiling of the Live Anywhere service ranked as the biggest announcement from the show. This new service links together its Xbox Live service with the upcoming release of Windows Vista as well as Windows-enabled mobile phones to allow users to connect and communicate with their online community regardless of their physical location. However, it is currently unclear when this service will be completely rolled out. "The ability for gamers to be continuously connected across three screens is incredibly important," said Wolf. "While we believe buy-once-play-anywhere will be hard to implement due to intellectual property and technology restrictions, the initial benefits of Live Anywhere--such as mobile scheduling and game asset purchases--will give Microsoft something that the other two competitors will be hard-pressed to counter."

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