Sony lures PS3 games creators with cut in fees

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Sony is cutting the fees it charges software developers in an attempt to encourage them to create more games for its struggling PlayStation 3 console.

The Japanese electronics giant is halving the cost of a software development kit in the hope of slowing the growth of arch-rival Nintendo, whose Wii console is enjoying a virtuous circle of increasing numbers of users and a growing portfolio of games titles.

The Wii, which went on sale in the US a year ago this week, has outsold the PS3 by two to one, although the PlayStation 2 dominated the previous generation of games consoles. By October, Nintendo had shipped 13.2 million Wiis, while Sony had sold 5.6 million PS3 consoles worldwide.

Sony is fighting to avoid a situation where the brightest games developers concentrate their efforts on creating products for the Wii, making that console more attractive, while the PS3 relies on Sony's in-house developers and a few core franchises. Last month, Capcom, the company behind Resident Evil, said it would be developing the latest game in its Monster Hunter series for the Wii rather than the PS3 as originally envisaged.

Sluggish PS3 sales are a double blow to Sony because the company is hoping that the Blu-Ray DVD player used in the console will become the industry standard high-definition DVD format, rather than the rival HD-DVD format.

The development kit for the PS3 will be halved in price to $10,250 (£5,000) in the US and €7,500 (£5,366) in Europe, and Sony will improve the technical support it offers independent developers. "As more and more new titles are developed for the format, Sony will significantly reduce the price of the reference tool in order to contribute to the cost saving measures of the development community," the company said.

The price cut comes just a few weeks after Sony cut the cost of the PS3 console itself, in the hope of improving demand over the holiday shopping season. Howard Stringer, chief executive, said last week that PS3 sales in the US more than doubled in the wake of the cut, and in the same week the console outsold the Wii in Japan for the first time.