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Sony Cuts PS3 Development Costs

ps3 binaryWhen Sony released earnings data at the end of October two things were abundantly clear: i. the PS3 was still a major component of their future plans; and ii. unless they started changing things soon, especially in time for the holiday sales push, the future wasn’t going to be too bright.

Somebody at Sony got the memo.

Monday, in an effort to increase game development, Sony cut the fees charged to game developers. The change comes a month after Sony cut global prices for the console.

The Software Development Kit, which Sony calls the Reference Tool, will now cost $10,250 in North America, $8,600 in Japan, and $11,250 in Europe. Sony will also improve programming tools included with the kit.

The PS3, for all it’s gaming power, has been in the cross hairs of two critical assaults. One is pricing. Even sold at a loss, the Blu Ray bundled PS3 is far pricier than Microsoft’s high horsepower Xbox platform or Nintendo’s playability centric Wii.

The other complaint is the lack of a quality title. Unlike Halo on the Xbox, the PS3 hasn’t offered a must-have platform-exclusive game. Sony’s yet to find a blockbuster. Reducing fees won’t likely change that. In fact, it could be months before any positive result of the move trickles to the market, but the effort to stimulate production is a positive sign.

Taken with console price cuts, the moves also pay lip service to the critics and acknowledge Sony is trying to get it right.

For the majority of the past year, both the Wii and Microsoft’s Xbox 360 have dramatically outsold the PS3. (And the Wii has easily trounced the Xbox). Inside Sony, the once storied gaming division has tallied seven consecutive quarterly losses. Last quarter they were nearly $850m in the red.

With the holidays fast approaching, and Wii’s in limited supply, it’s an ideal time for Sony to try and make an effort to catch up. And the need to see change couldn’t get much more urgent.

Sony sold 5.6 million PS3s through September (AP). The company reported sales doubled following the price cuts.

( Nintendo has sold 13.2m Wii’s and expects to sell 17.5m by the end of their March ‘08 fiscal year )

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