PlayStation 3 Gets Premium Pricing: $200 More than Xbox 360

The entry-level PS3 will have a 20GB hard drive, and the $599 model will differentiate itself with a 60GB hard drive; Memory Stick, Secure Digital (SD), and Compact Flash inputs; Wi-Fi capabilities; and High-Definition Multimedia Interface (HDMI). Both units will include an expensive Sony Blu-ray optical disk drive and one Bluetooth-powered, motion-sensitive hand controller. Also worth noting is that many of the features Sony promised for the PS3 are missing: Each unit will include only one Ethernet port, rather than the three Sony previously announced, and four USB ports, rather than six. The high-end version also includes only one HDMI output, not two as once promised.

What's most astonishing is that Sony is still going to lose hundreds of dollars per PS3, despite the high asking price of the console. Sony is hoping that faithful PlayStation devotees--who number around a hundred million--will come out in record numbers to buy its new console, which can also act as the hub of an HDTV-based home entertainment system.

Sony made the PS3 pricing announcement at the E3 2006 trade show in Los Angeles. The company tried to justify the high price of the PS3 by saying that the system's advanced features compensate for the high cost. However, many of the analysts, journalists, and game players who attended the event and witnessed the PS3 in action said the system was no more impressive than the Xbox 360.

Sony expects to sell 2 million PS3 consoles between the system's launch in November and the end of 2006. The company says it should sell 10 million PS3 consoles by the end of March 2007. Analysts expect Microsoft to sell about 10 million Xbox 360s by the time the PS3 is launched; however, Sony is expected to outsell the Xbox 360 in 2007, despite the exorbitant price of the PS3.