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Wednesday, May 10, 2006 - Page updated at 06:33 PM

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Electronics Entertainment Expo

PS3's hefty price tag raises eyebrows

Seattle Times technology reporter

LOS ANGELES — You'd expect that Sony's upcoming PlayStation 3 console would find a warm reception among the crowds at the Electronics Entertainment Expo, the annual convention of the video-game industry.

After all, these attendees are technology's early adopters, ones who for years have readily plunked down hundreds of dollars for video game systems and more for all the games to play on them.

But the PS3's hefty price tag is generating some concern even among the avid gamers Sony hopes to target when it debuts the system in North America on Nov. 17. A full bells-and-whistles version will cost $599 and have 60 gigabytes of storage space.

The 2006 Electronics Entertainment Expo

What it is: The annual industry-only conference for the video-game business.

When and where: Conference and workshop sessions run Tuesday-Thursday at the Los Angeles Convention Center. The expo runs Wednesday-Friday.

What happens there: About two-thirds of the 400 exhibitors will show off the games they're preparing to release by the holidays. Retailers will get a sneak preview of the hottest games of the year.

What to expect: The next-generation video-game systems from Sony and Nintendo will be the talk of the show. But increasing attention is directed at mobile gaming; half of the exhibitors will launch a title for a handheld platform.

Who's selling earplugs?: Walking the show floor is like being trapped in a Best Buy for days. There will be 5,800 flat-screen computer and television screens, all blaring at once.

Source: E3Expo

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For a hundred dollars less, Sony will sell a version with 20 gigabytes of storage space. But that version doesn't have wireless Internet access or compatibility with compact flash memory storage devices. It may also be problematic if you try to watch movies in the new Blu-ray high-definition format (you can watch them in standard definition video).

Those limitations are being widely derided online and by some at E3, who say that if you're going to pay that much money, you might as well pony up the extra $100 for the full package. But some said they weren't going to make the purchase anytime soon.

"It's too much," said Intel application developers Theodore Chilton and Mark Werder, almost in unison, when asked about the price tag.

"On top of that, you pay 600 bucks and you don't even get a game," Werder added. Both said that they would not immediately buy the console.

"I already have a 360," said Chilton, referring to Microsoft's next-generation Xbox 360 console, which went on sale last November. The Xbox 360 is generally considered to be about as powerful as the PS3 is expected to be, but is priced at $299 and $399. The more expensive version has 20 gigabytes of storage space and comes with some extra accessories.

The key difference between the Xbox 360 and the PS3 is that the PS3 has a Blu-ray player, which plays movies in a high-definition format. Microsoft is pushing a competing format to succeed the DVD, one called HD-DVD, but did not include the player as standard in the Xbox 360. It plans to sell the player as an accessory later this year.

The PS3 pricing announcement was higher than expected and will be considered a negative for the video game makers, said P.J. McNealy, an analyst with American Technology Research, in a research note to investors this week.

"We believe that the pricing news is not favorable for the video game publishers," McNealy wrote. "We are concerned about consumer spending levels on software given the high price of the hardware."

Some developers attending E3 said the PS3 was a good deal, especially considering that a Blu-ray player comes standard.

Patrick Lipo, studio creative director at Surreal Software, a Seattle-based subsidiary of Midway Games, said the PS3's price tag was higher than he had expected but not unreasonable.

"I think a lot of people are going to pick it up as a Blu-ray player," he said. In the short term, at least, early PS3 buyers will be the technology enthusiasts who don't mind parting with that much cash.

The technical power and graphics capability of the PS3 are equivalent to some computers that cost three or four times as much, said Timothy McCaslin, a developer at Aberration Studios.

"It's comparable with graphics to what I have on my computer system," he said. "It's just that good looking."

McCaslin's co-worker, Christopher Lotz, said with the high-end sound and video support built into the system, the PS3 is more than just a video gaming machine.

"You can't consider the PS3 as just a game center," he said. "It's an entertainment center."

Kim Peterson: (206) 464-2360; kpeterson@seattletimes.com

Copyright © 2006 The Seattle Times Company

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