Sony raises eyebrows with PlayStation 3 price

LOS ANGELES — You'd expect that Sony's upcoming PlayStation 3 console would find a warm reception among the crowds at the Electronics Entertainment Expo, the annual convention of the video-game industry.

After all, these attendees are technology's early adopters who for years have readily plunked down hundreds of dollars for video-game systems and more for all the games to play on them.

But the PS3's hefty price tag is generating some concern even among the avid gamers Sony hopes to target when it debuts the system in North America on Nov. 17. A full bells-and-whistles version will cost $599 and have 60 gigabytes of storage space.

For $100 less, Sony will sell a version with 20 gigabytes. But that version doesn't have wireless Internet capability or compatibility with compact flash memory storage devices.

Because of those limitations, some people at E3 say that if you're going to pay that much money, you might as well pony up the extra $100 for the full package. But some said they weren't going to make the purchase anytime soon.

"It's too much," said Intel application developers Theodore Chilton and Mark Werder, almost in unison, when asked about the price.

"On top of that, you pay 600 bucks and you don't even get a game," Werder added. Both said that they would not immediately buy the console.

"I already have a 360," said Chilton, referring to Microsoft's next-generation Xbox 360 console, which went on sale last November. The Xbox 360 is generally considered to be about as powerful as the PS3, but is priced at $299 and $399. The more expensive version has 20 gigabytes of storage and some extra accessories.

A price tag of $199 or $299 has generally been the norm for video-game consoles at launch. Sony's PlayStation and PlayStation 2 debuted for $299, as did Microsoft's original Xbox.

One reason the PS3's price tag is so high is because it has a Blu-ray player, designed to play movies and games in the high-definition video format considered to be the successor to the DVD. Microsoft is pushing a competing high-definition format, called HD-DVD, but did not include the player as standard in the Xbox 360. It will sell the player as an accessory later this year.

Kazuo Hirai, the chief executive of Sony Computer Entertainment America, said in an interview Wednesday that the PS3's price was justified because of all its features. Also, he said, consumers will be using the PS3 for the next 10 years.

Still, the PS3 pricing announcement was higher than expected and will be considered a negative for the video-game makers, said P.J. McNealy, an analyst with American Technology Research, in a note to investors this week.

"We believe that the pricing news is not favorable for the video-game publishers," McNealy wrote. "We are concerned about consumer spending levels on software given the high price of the hardware."

Some developers attending E3 said the PS3 was a good deal, especially considering that a Blu-ray player comes standard.

Patrick Lipo, studio creative director for Surreal Software, a Seattle-based subsidiary of Midway Games, said the PS3's price tag was higher than he had expected but not unreasonable. "I think a lot of people are going to pick it up as a Blu-ray player," he said.

Timothy McCaslin, a developer at Aberration Studios, said the technical power and graphics capability are equivalent to some computers that cost three or four times as much.

McCaslin's co-worker, Christopher Lotz, said high-end sound and video support built into the system makes the PS3 more than just a video-gaming machine.

"You can't consider the PS3 as just a game center," he said. "It's an entertainment center."

Kim Peterson: 206-464-2360