Ubisoft CEO sees Sony's console lead weakening

By Franklin Paul and Lisa Baertlein

NEW YORK/LOS ANGELES (Reuters) - Sony Corp. risks losing its iron grip on the game console market with its new PlayStation 3 and needs to significantly lower the price on its high-end machine to woo buyers, Ubisoft Entertainment's (UBIP.PA: Quote, Profile, Research, Stock Buzz) chief executive said on Wednesday.

"For sure Sony will have a different market share ... lower than before," Yves Guillemot, president and chief executive of Europe's second-largest video games publisher, told the Reuters Global Technology, Media and Telecoms Summit in New York.

Guillemot expects the degree of the decline to be linked to pricing on the PS3. It sells for $600 in the United States, $200 more than the top-end Xbox 360 from Microsoft Corp. (MSFT.O: Quote, Profile, Research, Stock Buzz) and $350 above Nintendo Co. Ltd.'s (7974.OS: Quote, Profile, Research, Stock Buzz) Wii.

"They have to decrease the price quite significantly," he said, declining to elaborate.

Sony's (6758.T: Quote, Profile, Research, Stock Buzz)(SNE.N: Quote, Profile, Research, Stock Buzz) 7-year-old PlayStation 2 sells for about $130 and has continued to rack up impressive sales figures versus its newer rivals. It was the leading console in the last generation with lifetime unit sales of 38 million in the United States alone.

Guillemot said Ubisoft plans to deliver an exclusive PS3 title in Europe but declined to reveal the name. Gamers have complained that there is not yet a must-have game available only on the PS3 and Sony has promised to deliver this year.

Ubisoft, known for its Tom Clancy games like "Splinter Cell," as well as its "Prince of Persia" title, has seen its fortunes rise on its early bet on the Wii.

Representatives from the Paris-based company worked closely with Nintendo developers to customize its games for the Wii's motion-sensing controller, which has become a relatively low-tech hit.

"The game play has to be the key factor. With very high-end machines, we tend to forget," he said.

Electronic Arts Inc. (ERTS.O: Quote, Profile, Research, Stock Buzz), the number-one game publisher in the $30 billion video game market, holds a stake of roughly 15 percent in Ubisoft.

Guillemot said he is ready to hear any proposals new EA CEO John Riccitiello may have regarding a merger, but reiterated the company's desire to control its destiny.

"The goal is to run the show as much as we can and do the best for our shareholders," he said.