Christmas console price cuts unlikely in Aust - News - Business

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This story was printed from ZDNet Australia.
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Christmas console price cuts unlikely in Aust

By James Pearce, ZDNet Australia
September 27, 2002
URL: http://www.zdnet.com.au/news/business/soa/Christmas-console-price-cuts-unlikely-in-Aust/0,139023166,120268560,00.htm

Australian consumers are unlikely to benefit from further price cuts in games consoles in the run-up to the first Christmas that Xbox will challenge PlayStation 2 and GameCube for gamers hearts - and wallets.

Industry experts are quick to point out the US$30 billion video game market has never supported three consoles, alongside the PC, noting that Dreamcast maker Sega Corp. of Japan gave up the console business when it couldn't compete.

However, despite the need to gain market share in order to sell games, it looks like the price-cut wars experienced earlier this year are over.

Sony Australia has unequivocally ruled out lowering the price of PlayStation 2, irrespective of what its competitors do. "With just under 500,000 units shipped in Australia, PlayStation 2 is firmly established as the console of choice for all those who are serious about their entertainment options." said Michael Ephraim, managing director of Sony Computer Entertainment Australia. With sales so strong, Sony see no need to lower the console price any further.

Microsoft are refusing to rule-out a further reduction in the price of Xbox, but the company already loses an estimated AU$150 toAU$300 on every machine sold. A spokesperson for the company refused to comment on the probability of price cuts to improve the sales of the console. "I can't say that, yes or no," she said.

Rather than further price cuts, the spokesperson said Microsoft will be concentrating on bundles to promote its console. The company was very pleased with the Halo Combat Pack, a Father's Day promotional bundle.

Nintendo currently has the cheapest console on the market, the AU$329 GameCube is AU$70 less than the PlayStation 2 and Xbox. However, they also have the lowest market share in Australia. At the time of this articles publication Nintendo had failed to respond to ZDNet Australia questions as to how they planned to increase their market share.