Sony Computer Entertainment President Ken Kutaragi fired back saying:

"This is the PS3 price. Expensive, cheap — we don't want you to think of it in terms of game machines. Because the PS3 is like nothing else.For instance, is it not nonsense to compare the charge for dinner at the company cafeteria with dinner at a fine restaurant?

It's a question of what you can do with that game machine. If you can have an amazing experience, we believe price is not a problem.When we announced the PlayStation price, it was said to be expensive. Same for the PlayStation 2.

However, when released, both had sales that were unthinkable for previous game machines. This is because both offered experiences that could not be had on previous game machines.

With the PS3, you can have next generation game experiences that could previously not be experienced — things like next generation graphics and various services via the network. And, as with the PS and PS2, we believe people who like games will, without question, purchase it.”

Kutaragi apparently went on to say that the PS3 is probably too cheap.

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The internet bandwagon is filling up with critics of the PS3 and its questionable price structure. Normally I consider climbing onto the bandwagon a bit pointless but right now I feel less like I volunteered to ride and more like I was crossing the street when the bandwagon came tearing around a corner at a 170 and imbedded me onto its front grill.

Right now Sony has had little to show consumers that justifies its high price point. The hardware sounds nice but without any real software announcements it all sounds like promises that may or may not amount to anything. Without something really unique that the other systems are not offering I cannot imagine consumers justifying the expense.

Sony only has the brand name (admittedly a powerful one, Playstation like Nintendo has become synonymous in pop culture with console gaming) and a long relationship with a number of third-party developers to offer consumers. This does mean that it is in a better position then Microsoft’s original Xbox when it debuted on the previous generation.

As for Kutaragi’s claim that the PS3 is like an expensive dinner that consumers will not mind buying, there is a principle in philosophy that states that the value of a metaphor is equivalent to the similarity of the concepts that are being compared.

In this instance Kutaragi would have us compare an expensive dinner to a high-priced video game console. The difference that should leap to everyone’s mind is of course necessity. Human beings require food to function and while going to an expensive restaurant is still a luxury compared to say stalking, killing and preparing a meal for yourself I have a feeling it is a luxury that more people can find themselves rationalizing than say videogame console that probably costs as much as a month’s rent. The problem that Kutaragi is ignoring is that consoles are essentially luxury items with almost no concrete value. It does not even have the benefit associated with an items like a pricey stereo or television in that it they are often “family items.” Generally, consoles are luxury purchases for a single individual to enjoy.

It does not help that Kutaragi‘s Nero-esque claims that consumers will ignore the price of the console in favor of its many features do nothing to inspire confidence in the world of game punditry.

I do not think, however, that this is the death cry of the Playstation. I imagine that it means the PS3 will spend a lot of time in third place over next couple of years, until the inventible price drops occur and second hand systems become widely available. But it is still difficult to parse Sony’s strategy for the PS3. They seem willing to sacrifice early-adoption and market-share for the opportunity to bring their Blu-ray technology into as many homes as possible.

The original Xbox appeared on the market with a number of the same problems and it took nearly a year for it to debut Xbox Live and Halo to give gamers a reasons to seriously consider the system.

In the long term this may actually benefit Sony if it prevents the format from following, the fate of Sony’s previous attempt at a proprietary format, Betamax, as one of history’s great business failures.

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George Santayana said: “Those who ignore Betamax are doomed to repeat it. Those who study Betamax are doomed to know it is repeating.”