The Wii is cheaper than the Playstation and the XBox keeps getting cheaper. But Sony does not fear the price cutting strategies of its rivals. It has taken Friedman's "The World is Flat" to heart and plans to outsource its video game development projects to India for massive price savings.
Game development currently requires heavy investment. Developing a game could take about 18 months and require 3-5 million dollars for the Playstation 2 and 20-30 million dollars for the Playstation 3.
Sony has set the wheels in motion by transferring technology for game development from its London studio to India and training local developers. Future plans include setting up a brand new facility for this purpose. Sony is keen to leverage its position in India to offer the facilities to multi-format game developers for additional revenue opportunities.
Sony is particularly keen to develop content for the Indian market. Racing, action, sports and casual gaming are believed to be potentially lucrative genres among Indian consumers.
Perhaps the world famous Indian Institutes of Technology should be working on a curriculum for gaming development. When the market values in at $43 billion, no one can afford to ignore it.