Sony Has `No Plans' to Cut PS3 Price, President Says (Update1)

July 6 (Bloomberg) -- Sony Corp., the world's biggest maker of game consoles, said it has no current plans to lower the price of the PlayStation 3 after gaming Web sites reported some U.S. retailers will offer discounts from next week.

``We have no immediate plans as of now'' for price cuts, President Ryoji Chubachi said today in an interview in Tokyo. Any change in the console's price ``is a matter'' for Sony's game unit, Sony Computer Entertainment Inc., he said.

A price cut would help spur sales of Sony's $599 console, which has trailed Nintendo Co.'s Wii since the players were introduced late last year. Sony said in May that higher sales and lower production costs will help reduce losses at the game division by almost 80 percent this fiscal year to 50 billion yen ($405 million) after a record loss.

Web sites including GameDaily and CAGCAST Video Games reported that PlayStation 3 consoles will be sold at Circuit City Stores Inc. branches from July 12 at $499, with some citing an unidentified ``merchandising manager at one of the world's biggest retailers.''

``It is hard to imagine that Circuit City alone would cut the price on a game consoles,'' said David Abrams, chief executive officer at CAGCAST, an online game retailer in Tokyo. ``This must be a retail-wide move.''

Bill Cimino, a spokesman for Circuit City, the second-largest U.S. consumer-electronics chain, declined to comment on the report. After-hour calls to Best Buy Co. and Wal-Mart Stores Inc. weren't returned.

Daisuke Nakata, a Tokyo-based spokesman at Sony Computer, said the company doesn't comment on its price strategy.

Shares of Sony rose 1.2 percent to 6,540 yen on the Tokyo Stock Exchange. Its Frankfurt-traded stock recently rose 1.5 percent to the equivalent of 6,521 yen.

E3 Games Show

Sony's rivals may announce price cuts of their consoles at the Electronic Entertainment Expo game show to be held in Santa Monica, California next week, Yuji Fujimori, a Tokyo-based analyst at Goldman Sachs Group Inc., said in a report dated yesterday. He expects Sony to cut the PlayStation 3 retail price by as much as $150 from October, he said.

Sony's ambitions to create the industry's most advanced player, in terms of computing power, backfired as a shortage of components forced the company to delay the PlayStation's debut to last November.

Kyoto-based Nintendo has grabbed the biggest share of the market for new consoles by selling its machines at a cheaper price and offering a motion-sensor controller that can be swung like a tennis racket or sword to play games. The Wii sells for $250 in the U.S., half the price of the cheapest PlayStation 3. Microsoft Corp.'s Xbox 360 costs as little as $299.

Market Value

Last month, Nintendo's market value overtook Sony's for the first time, underscoring the success of the Wii.

Nintendo's Wii outsold the PlayStation 3 in Japan for a fourth month in June, helped by sales of the latest ``Resident Evil'' action game, Tokyo-based researcher Enterbrain Inc. said this week. In the U.S., sales of the Xbox 360 surpassed the PlayStation 3 by four to one in May, according to data compiled by Port Washington, New York-based NPD Group Inc.

Yesterday, Redmond, Washington-based Microsoft said glitches with the Xbox 360 console will cost as much as $1.15 billion to repair and that the device missed its sales forecast.

To contact the reporters on this story: Hiroshi Suzuki in Tokyo at Hsuzuki5@bloomberg.net; Yoshinori Eki in Tokyo at yeki@bloomberg.net.

To contact the editor responsible for this story: Teo Chian Wei at cwteo@bloomberg.net.