Sony launches cheaper PS3 in U.S.; sights still set on making it into entertainment hub

ps3 smallSlowly but surely, methodically, Sony is lining up its Playstation 3 as an affordable gaming console and establishing it as the center of a home entertainment network.

Sony today announced it will launch a cheaper model of the Playstation 3 in the United States, hoping to attract more buyers and getting the console into more American homes. The newest version of the PS3 features a 40 GB hard drive and will cost $400, a heck of a deal considering it has a built-in Blu-ray drive for playing high-definition DVDs. The 40 GB PS3 will go on sale Nov. 2 in time for the Christmas buying frenzy.

To achieve its lower price point, Sony made a few hardware compromises. USB ports are down from 4 to 2, and there are no slots for different memory card types. In perhaps its most controversial decision, Sony has removed backward capability from the cheaper PS3, meaning it cannot play PS2 games.

“We’re choosing to focus on the Playstation 2 consumer with the Playstation 2, which remains incredibly relevant, and focus on the Playstation 3 consumer with the new 40-gigabyte model and the great software coming out,” said Jack Tretton, president of Sony Computer Entertainment America, who notes that 200 titles for the PS3 will be available by Christmas. (Reuters.)

“Backward compatibility is a nice secondary consideration, but it’s far from the number one priority,” he said.

Backward compatibility is still available on Sony’s 80 GB model, which received a $100 price drop today to $500.

The Playstation 3, which cost as much as $600 at its release, has sold poorly in comparison with Microsoft’s cheaper Xbox ($280 to $450) and Nintendo’s Wii ($250), both of which now lead Sony in sales.

Despite the sluggish start and criticism surrounding the PS3, Sony continues to plod forward, announcing many features in the past few months that are more home entertainment oriented than gaming.

sony stringer smallSony Chief Executive Sir Howard Stringer said this week the company is building a system to distribute video and music through the Playstation Network, its online games system. It’s a significant step toward moving the PS 3 from a console that plays games to one that handles all the home’s entertainment needs and is capable of networking with other Sony hardware.

“This is a Japanese and American combined effort to build a platform around the common software architecture to distribute video via the Playstation network and into Playstation Portable (PSP) and beyond.

“We are trying to get our devices to talk to each other efficiently, Playstation Network should migrate from gadget to gadget. But initially it starts with Playstation devices and then to TV and beyond.”

Of course, the PS3 can already be used as a media extender to enable content from a Windows-PC to be streamed to a television. Additionally, content stored on a PS3 can also be transfered and streamed to a PSP.

One of the Playstation’s coolest TV features, however, is to be available only in Europe and not in the U.S., at least not yet. In early August, rumors began surfacing surrounding the PS3’s DVR capabilities. By the end of the month Sony’s PlayTV was unveiled for use in 2008 in the U.K., France, Italy, Germany, and Spain.

The significance of PlayTV is far-reaching. The PS3 moves beyond a game console to become a personal video recorder (PVR) with dual high-definition tuners, allowing users to view, record, and play free over-the-air channels through the PS3 console.

Earlier this month, Korea Telecom chose the PS3 as its set-top box for the Internet Protocol TV (IPTV) service named Mega TV, launching next year.

last100 is edited by Steve O'Hear. Aside from founding last100, Steve is co-founder and CEO of Beepl and a freelance journalist who has written for numerous publications, including TechCrunch, The Guardian, ZDNet, ReadWriteWeb and Macworld, and also wrote and directed the Silicon Valley documentary, In Search of the Valley. See his full profile and disclosure of his industry affiliations.

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