You know the PS3 plays Blu-ray, right?

[BLUpassion]

Hey all,
This article is coming from a stock market analysist. Thought you'd all want to at least read it.

http://www.fool.com/investing/genera...ray-right.aspx

You Know the PS3 Plays Blu-ray, Right?
By Steven Mallas September 21, 2007
1 Recommendation


Sony's (NYSE: SNE) PlayStation 3 unit is struggling. Nintendo's (OTC BB: NTDOY.PK) Wii console, and the Microsoft (Nasdaq: MSFT) Xbox 360, are stealing the glory from the once-dominant brand in video game hardware. But Sony thinks it has a solution -- a blue one, in fact.

The electronics giant feels that consumers aren't giving enough credit to the PS3's Blu-ray capability. According to a report in the Financial Times, Sony intends to increase its efforts to communicate to the gaming set that Blu-ray is cool and should be valued accordingly. The report stated that Kazuo Hirai, the CEO of Sony Computer Entertainment, will be working with Sony Pictures and Sony Entertainment to highlight this feature.

What Sony is basically telling the consumer is this: Sure, you'll be throwing down enough money to open a mutual fund account when you buy a PS3. But besides the incredible graphics and hardcore gameplay, you can also watch your favorite films on the exciting new Blu-ray format!

That's all well and good, but price resistance is a pretty steep obstacle to overcome. The PS3 will set you back $500; an Xbox 360 package with a hard drive costs $349, while the lovable Wii is only $250.

Unfortunately for Sony, I'm not sure that leveraging Blu-ray will do much of anything. It may appeal to some, but the best weapon the company could employ right now is a further reduction in the console's cost. I'm not against highlighting the Blu-ray capability -- it is a selling point, to be sure, and it does explain the unit's high price tag. But at this point, I'd support a price cut more than anything else.

Granted, it would be difficult for Sony to do another one right away; after all, the conglomerate already enacted some relief not long ago. Sure, Sony, promote the Blu-ray capability, and use the release of Marvel Entertainment's (NYSE: MVL) Spider-Man 3 on Blu-ray to your advantage. But remember that your biggest killer app -- before Take-Two Interactive's (Nasdaq: TTWO) next Grand Theft Auto game makes its debut next year -- might be to make the PS3 as economically attractive as possible for your customers.