Sony cutting prodution costs even more... Shifting production to China

[tarakan69]

http://www.theregister.co.uk/content/54/29767.html

Sony shifts PS2 production to China
By gamesindustry.biz
Posted: 14/03/2003 at 13:17 GMT


Sony is to shift the production of its PlayStation 2 console to Chinese production facilities next year in a bid to reduce costs, the company announced this week, prompting speculation that the company will pass on the cost savings to consumers in the near future.

Spokesman Koichiro Katsurayama said the company would move production to Chinese plants run by Hon Hai Precision Industry Co. and Asustek Computer Inc, and cease production in Japan, where half of its current PS2 output is based.

On a cost basis, the move makes a huge amount of sense for Sony Computer Entertainment; with average labour costs in China around one twentieth of that in the US, according to official US and Chinese labour statistics.

The move has prompted speculation that a price cut for the console is on the cards, with US analysts predicting a drop from its current $199 price point at some stage between May and the Summer.

Closer to home, many expect Sony's next move on price to be £129.99, with a cut expected to be in place sooner rather than later to keep the machine's momentum going.

Meanwhile, Sony Computer Entertainment America is ramping up shipments of the PS2 network adapter, with one million expected to ship by March 31st 2003.

According to SCEA, an average of 2,500 consumers are joining the PS2's online community every day, with the broadband/dial up split placed at 58 per cent to 42 per cent - a choice that European users won't have, after SCEE's decision to make the European service broadband-only.

Interestingly, 73 per cent of PS2 online users in the US are in the 18-34 age group; a demographic that only represents 47 per cent of the total installed base.