Sony Corp. has no plans to cut the price of its PlayStation 3 (PS3) at present to pep up demand and counter surging sales of Nintendo's rival game console Wii, Sony's president said on Friday.
Sony President Ryoji Chubachi told Reuters operating profit margin at its mainstay electronics unit, which makes hot-selling Bravia LCD televisions and Cyber-shot digital cameras, was likely to exceed its 4 per cent target for the current year to March, 2008.
At present we have no plans, to cut the PS3 price, Mr. Chubachi said in an interview.
Sony has packed cutting-edge technology such as a Blu-ray high-definition optical disc player into the PS3, driving up production costs and making its retail price more than twice as expensive as the Wii.
The higher price tag and lack of attractive software titles have been cited as main reasons the PS3 has been trailing the Wii in sales, and analysts have been widely expecting Sony to soon slash the price to spur on demand.
In a Reuters poll of four game analysts this week, three expected Sony to cut PS3 prices by $100 by the end of the year, while one analyst said a cut of $150 is more likely.
The PS3 with a 60-gigabyte hard disk drive carries a price tag of $599 in the United States, while the Wii sells for about $250.
If you take a look at how PlayStation and PlayStation 2 have taken off, this is not such an unusual start, Mr. Chubachi said.
When the PS2 made its debut in 2000, Sony was initially criticized for lack of strong titles, and some software publishers said the machine was too complex to develop for.
Sony eventually overcame those difficulties and has sold more than 120 million PS2 units, making it the top-selling video game console ever.
Mr. Chubachi said the company was on track to hit its target of a 5 per cent operating profit margin for the year to March 2008, and its electronics division will likely exceed the 4 per cent target.
The margin targets, set in 2005, have been considered as the most visible indicator of success for turnaround efforts by chief executive Howard Stringer and Mr. Chubachi.
We set the targets when the electronics division was not doing so well. But we saw some recovery in the unit, and it now can make a bigger contribution for Sony's effort to hit a 5 per cent margin, Mr. Chubachi said.
Sony was late in shifting its resources to flat TVs, but an alliance with South Korea's Samsung Electronics Co. Ltd. in liquid crystal display (LCD) panel production and massive marketing campaigns helped the company become one of top suppliers of LCD TVs.
Ahead of Mr. Chubachi's comments, shares in Sony closed up 1.2 per cent at 6,540 yen, outperforming the Tokyo stock market's electrical machinery index IELEC, which fell 0.79 per cent.