Hollywood Reporter

Sony Secretly Planning PStwo?

New console form factor to release on same date as GTA: San Andreas! Is this one-two punch possible, likely, or just a dream? Hollywood Reporter has the scoop.

Sony celebrates anniversary with downsized PStwo

By John Gaudiosi

Although Sony is keeping quiet, video game analysts and retailers expect the market-leading console manufacturer to ship a new unit to mark the fourth anniversary of Sony' s best-selling video game system Oct. 26. The PStwo, as the console will be called, is physically 30% smaller than its popular PlayStation 2 sibling and is expected to cost $149.

The move is significant enough that industry insiders believe Take-Two Interactive pushed back the release of " Grand Theft Auto: San Andreas" from Oct. 19 until the same day PStwo goes on sale.

" Sony has not commented publicly about the device but has already applied for the copyright of PStwo," American Technology Research video game analyst P.J. McNealy said. McNealy added that the new device will include built-in online capabilities, just like the current PS2.

There have been PS2 hardware shortages throughout the summer, and analysts suspect Sony deliberately has been bleeding retail shelves dry to make the switch.

Lower Price Point?
Despite the competitive price point, retailers and video game publishers have been asking overtly for another price cut on both the existing PS2 and Microsoft' s Xbox to help game sales during the crucial fourth-quarter period, which represents more than 50% of annual game sales.

McNealy said that even without a price point drop to $129, the new form factor alone for PStwo would increase sales for Sony at a crucial time. " A new box and console design will make the system fresh," he said.

He also noted that Oct. 26 is just weeks before Microsoft' s " Halo 2" ships to retail. By combining " San Andreas" with a new console form factor, he said, Sony has a one-two punch.

Filling the Shelves
According to early estimations for August data from the NPD Group, Sony sold about 212,000 PS2s last month. That' s 27% below PS2 sales a year ago at a higher price point ($179 vs. $149). Microsoft sold about 217,000 Xbox units last month, which is up 50% from sales a year ago and gave the hardware maker the No. 1 position. The PS2 shortages have helped Microsoft distance itself as the clear second-place runner in the current video game wars, ahead of Nintendo' s GameCube, which retails for just $99.

The summer is traditionally a slow period for the game industry, but the hardware price cuts before the E3 video game industry convention and an assortment of big game releases throughout the year have helped keep momentum going. The upcoming fall release schedule boasts a large number of big game franchises, which should help the game industry finish the year strong.

PSOne... Still going.
The new PStwo, whenever it launches, will eventually be part of a price-reduction program. Sony has stated its long-term strategy to turn PS2 into a 10-year console, which it will support long after the third PlayStation console ships. (Nothing has been announced, but PlayStation 3 is expected to bow in fall 2006.) And PStwo looks like the second phase of that strategy.

Sony has had great success with PSone, the similarly smaller version of the first PlayStation console, which continues to move hardware at its $49 price point. Several publishers, including Electronic Arts, Atari, Take-Two and Sony, continue to release new games for the 9-year-old console.