Why is the PS3 Cheaper in Japan?

Good news: Sony has announced both that the price of the 20GB PS3 will be lowered, and that the HDMI port will be standard on both PS3 models. If that's something that's really important to you (I think it's important, personally), you don't have to shell out another $100 to get it. A lot of you have probably read my other article, where I point out PS3's flaws, but I have to say this was a good move on Sony's part. As the launch dates of the PS3, Wii, and Xbox 360's HD-DVD drive approach, a little more competition will really help the consumer.

Now here's the bad news: the price drop is only in Japan. (Technically, the HDMI port was Japan-specific too, but it's a safe guess to say Sony wouldn't make two separate 20GB models, one with HDMI and one without it.) This is a little strange, considering Sony also announced recently that PS3 games will cost around $60 in the US, while they cost about $75 to $85 in Japan. Why would Sony charge less for a console in Japan, and then charge more for the games? If people in Japan were just less willing to pay a lot of money for video games, they would lower both prices. And if they were more likely, Sony would keep both prices higher. What's the point of having a middle ground?

Well, let's look at the possible factors. First of all, there's the Xbox 360, which is already available, and it's cheaper than the PS3. Plus there's an HD-DVD drive for the 360 coming out on the same day. So is Sony afraid of Microsoft? Could be, but look at the numbers. Microsoft currently sells around 1,000 Xbox 360s a week in Japan; Sony sells 20,000 PS2s a week. And PS2 is a lot older than the Xbox 360. The point is that either the Xbox or Microsoft in general never caught on with consumers in Japan. Sony is smart enough that they know that, and they know that Microsoft gives them very little competition in Japanese markets. So it has to be something else.

What else is there? They could just be trying to be nice, but that doesn't get them anywhere if games cost more in Japan. There is, of course, the other console, the one a lot of people forget about: the Wii. It may not be the fastest of the three consoles, it may not have an HD disc drive, it may have a funny-looking controller, but let's face it: it's pretty cheap compared to the 360 or the PS3. That's not even the only selling point of the Wii, but that's not the focus of this article, so suffice it to say that Wii does have its benefits.

At this point, that seems to be the most reasonable answer. It looks like Sony is lowering the price of the PS3 because they feel less confident about their strength against the Wii in Japan. But it could be the other way around, too. They might be even more confident, because when the price of a console goes down it means they're relying more on the games. They could be confident that their games will sell well; this also explains the higher price for games in Japan. But either way, it looks like Sony's price cut was a response to the Wii, not the Xbox 360. They did a pretty good job of hiding it, though; their announcement came just after Microsoft's announcement about the HD-DVD drive. In any case, this is proof that competition is good; companies fight, but the consumer usually wins.