On Tuesday, Sony Corp made the announcement that there will be a price cut greater than 10% in its latest generation console in Japan. This is a move by the company to enable its PlayStation 4 to gain traction in a market where sales of smartphone games seemed to have surpassed those on consoles. Effective from next month, the new Japanese price of the console will be $292 or ¥34,980. This is considerably lower when compared to the console’s price tag in Europe, which is around $450 or 399 euros. Similarly, the cost of buying a PS4 in the US is $399. No comment was made by a Sony spokeswoman when asked if similar price cuts would be introduced elsewhere.
The head of PlayStation in Japan and Asia, Atsushi Morita said that the company wants to provide lots of potential users the opportunity to enjoy the world of the PlayStation. He spoke at a news conference in Tokyo where he also unveiled the PlayStation VR, the formal name of the virtual reality headset project of the company, which was previously called Morpheus. In recent years, there has been rapid decline in Japan’s videogame market due to competition from high-quality games that can be enjoyed on smartphones.
Sales of video-game consoles and other related software have declined by half to reach ¥37.3 billion in the last seven years. In contrast, the sales of the games played on mobile devices including smartphones and laptops had amounted to ¥562.2 billion in 2014 even though they had been a mere ¥400 million in 2007. Introduced in November of 2013, Sony’s PlayStation 4 has given a strong global performance as it topped sales of 20.2 million in March and has left rivals such as Xbox One of Microsoft Corp and Wii U of Nintendo in its wake.
However, as of September 6, only 1.66 million units of the PS4 had been sold in Japan according to data gathered by Famitsu, a videogame magazine publisher. Regional sales breakdown isn’t disclosed by Sony. Nevertheless, Sony isn’t the only gaming company that’s finding it difficult to gain ground in Japan. There was a slump in Nintendo’s share price until earlier this year when it announced its entry in the smartphone gaming market with DeNA Co. Similarly, the game business of Sony’s longtime rival, Microsoft also lacks a major presence in the gaming market of Japan.
Sony denied the allegations that prices had been reduced in its home market because of the slow performance of the console in Japan. Instead, the company said that it was attempting to take advantage of the considerable increase in the number of PS4’s games in the past year. It was also announced by the Japanese firm that its game streaming service, which is being offered in the US, called PlayStation Now, will also be launched in its home market on Wednesday. It remains to be seen if the performance of the company’s console sees any improvement after such as major cut in price.