Video game giants battle it out on price

By PETER GRIFFIN

The video game price war is intensifying. After Sony dropped the price of its video game console by 20 per cent to $399 this week, Microsoft immediately matched the price.

The rivalry between Sony and Microsoft will mean attractive deals to New Zealand consumers who resisted the marketing splurges from the gaming giants in the run-up to Christmas and held on to their $500.

It follows smaller price drops last week for the US and Canadian markets for Sony's Playstation 2 console and Microsoft's rival Xbox (from US$199 to US$179).

Sony appears to be clearing the decks of its existing PS2 model before the launch mid-year of an improved version that will feature design improvements and bundle in a network adapter for internet game play, previously sold separately.

Sony Computer Entertainment's New Zealand managing director, Steve Dykes, said the Japanese electronics maker had "pretty aggressive" sales targets this year, with price and availability of game titles the big drivers of consumer demand.

But he said the price drop was not designed to clear stocks of the existing PS2 before the new model arrived here.

"This is not about clearing out old stock. This is much bigger than a running change to a console.

"Yes we'll be introducing that console at some stage, but we've not yet advised of when we'll be doing that."

Xbox machines already on the market have networking capability built in, but Microsoft New Zealand does not know when the Xbox Live online gaming service will arrive here.

Just back from the gaming industry's major event, the Electronic Entertainment Expo in Los Angeles, Xbox marketing manager Wilf Robinson said the price drop was to be expected, as the retail price in the Australian market was already at A$399.

"A $100 difference doesn't really stack up given the exchange rates at the moment," he said.

"We always said it was going to be a battle, we never expected Sony would make it easy for us," said Robinson.

In January, Microsoft said it had sold 20,000 Xbox consoles since launching in New Zealand in October.

A good pre-Christmas selling season contributed to the result.

Robinson would not say how many consoles had been sold since.

"The first two months of the year are always seasonably bad for the industry and we've budgeted for that."

But, he said, sales had improved in March and April.

Microsoft had begun selling Xbox in The Warehouse stores.

In the key US market, the Xbox is understood to trail Sony in sales five million Xboxes to Sony's 19 million PS2 consoles.