Sony risks losing console crown to Microsoft

$500 to $600 for a games console will be too much for many users

Sony is taking a serious risk with its strategy of including a Blu-ray drive in its PlayStation 3 to entice consumers to pay a premium price for the new console, despite lower cost alternatives from Nintendo and Microsoft.

Sony's console pricing strategy is "fraught with risk", according to ABI Research, and may ultimately jeopardise its market leadership.

"Asking consumers to pay $500 to $600 for a games console, when most have yet to purchase an HDTV, will give many current PlayStation 2 owners reason to consider the competition," said Michael Wolf, principal analyst with ABI Research's broadband and multimedia research practice.

"Sony has clearly hamstrung itself with a box that is expensive to manufacture, and these costs are driving a retail pricing strategy that places a high financial burden on the consumer."

As the E3 show came to a close last week ABI Research said that Nintendo was the "clear winner in the buzz stakes" as the firm won praise for its motion-sensing controller.

By focusing on unique gameplay experiences and shunning the graphics space-race consuming its competitors, Nintendo is enjoying much higher publisher support than was evident at the launch of its GameCube, the analyst firm said.

ABI Research also believes that Nintendo is the best positioned of the three console makers to expand into the casual gamer and new gamer audiences with creative titles such as Wii Sports and WarioWare: Smooth Moves.

While Nintendo had the best showing at E3, the biggest announcement, in ABI Research's judgement, came from Microsoft with the unveiling of the Live Anywhere service.

"The ability for gamers to be continuously connected across three screens is incredibly important," said Wolf.

"While we believe buy-once-play-anywhere will be hard to implement due to intellectual property and technology restrictions, the initial benefits of Live Anywhere, such as mobile scheduling and game asset purchases, will give Microsoft something that the other two competitors will be hard-pressed to counter."