Expensive games could accompany a shift in business plans over at Sony.
by Anoop Gantayat

September 23, 2006 - Following up on Ken Kutaragi' s pre-TGS keynote address, Japanese site Impress Watch has posted the latest in its " Random Tracking" editorial series. This periodic feature is written by Munechika Nishida, a well-known contributor to the Asahi Shimbun newspaper and Ultra One PC magazine, and this latest update has some surprising revelations on the PS3.

To most gamers, the most eye-catching part of the feature is a claim about game prices. Citing " multiple information sources," the article states that the price of PS3 games will be concentrated in the 8,800 to 9,800 yen range. The primary reason given is the rising cost of development.

In Japan, the standard price of a PS2 game is 6,800 yen, with only the biggest titles like Dragon Quest and Final Fantasy rising to the 8,800 yen mark.

There' s a deeper story to this price hike. According to the article, Sony was, as of E3, planning to alleviate cost pressures on 3rd parties by lowering royalty costs. The thinking at the time was that users would be able to create their own games and distribute them online throught he PS3, and Sony would not be able to charge royalties for such titles. The company would want to offer 3rd parties a similar pricing environment, with the savings from royalty costs passed on to consumers in the form of lower software prices.

However, this strategy has apparently been put on hold as Sony has been unable to complete preparations for turning the PS3 into an open platform. The article claims that Sony has made no progress in the preparations for allowing users to make their own games. Such preparations include a development environment, manuals, security management and community features.

It should come as no surprise that preparations have been delayed, as the article also claims that even support for 3rd party developers is lagging.

With the delay in progress towards an open platform, the site speculates that Sony is switching to a more traditional business model where the PS3 will be sold at a " surprisingly low price" and losses will be recouped on software royalties. This is the business model that was used for the PlayStation and PlayStation 2.

As part of this strategy shift, we could be seeing changes to Sony' s plans for multiple PS3 SKUs. The article claims that while the 60 gigabyte PS3 will still be available, the company' s focus will be shifted to the 20 gigabyte model. This is part of Sony' s hope to change from a multi SKU business model to a single SKU model. The article cites as a source software distribution firms which noticed, at the end of August, a change in Sony' s marketing approach for the PS3.

Some big revelations to be sure. We should be able to get a grasp on how accurate Nishida' s sources were as PS3 pricing and shipment details become available in the coming weeks.