Sony hopes money made from game sales will make up for the three years of loss it expects to make on powerful handheld console PS Vita.
In an interview this week Sony number two Kaz Hirai said the Japanese company expects to begin making a profit on the hardware within three years.
Sony announced US and Euro pricing this week at E3. The Wi-Fi model will go for $249 / €249 and the 3G plus Wi-Fi for $299 / €299. Game and Play.com were the first UK retailers to put a price on Vita, with both listing the Wi-Fi only version for Ł229.99 and the 3G plus Wi-Fi model for Ł279.99.
The price, cheaper than many expected for what is a powerful gaming handheld, is a deliberate attempt by Sony to broaden the Vita's appeal beyond core gamers and technology enthusiasts, Sony Computer Entertainment Europe boss Andrew House told Eurogamer yesterday at E3.
And it's willing to take a hit on each Vita sold because it reckons game sales will compensate.
"We have operated by and large very successfully around a model that works on what we call a blended margin," House said.
"We have very low margins or possibly negative margins on the hardware, offset by a much more attractive margin structure on software and peripherals. We'll manage the business very much in that same way for Vita."
Sony, which makes money on every game sold on its hardware by virtue of a license fee it charges publishers, is yet to announce how much Vita games will cost.
Sony is also yet to confirm UK pricing for the Vita itself, but House described the Ł230 / Ł280 listed by UK shops as "a really good starting point".