Michael Ephraim, head of Australian Playstation business has made a right old mess trying to explain the lack of a PS3 price cut in Australia. Ephraim pointed out that there is a difference in the cost of living between the US and Australia and that the PS3 had been released four months earlier in the U.S. and they have had experienced the joys of a Christmas period.

Why did you announce a bundle instead of a price cut?

Well, let's be clear. The US announced the discount on the 60 Gig SKU that will be a run-out model, and then they are introducing the 80 Gig SKU with MotorStorm back up to US$599. That's their strategy. The US launched four months ahead of us, they had a Christmas, we haven't had a Christmas yet.

But all that aside, when you look at the value, the US price cut was US$100, with exchange rates that's $120 Australian. We've crammed in $280 worth of value, and we're not doing it with smoke and mirrors, either. Resistance and MotorStorm are the number one and number two games in Australia, and million-selling games each globally. There's also a Sixaxis controller. So that's real value - $280 versus $100.

With about 61,000 PS3s sold through in Australia based on GfK, we think the next rung of purchasers are those gamers who have said: "I want a PS3 but I'll wait until there's an offer". I think this bundle will strike a chord with them.

We are also working with different outlets, for example Harvey Norman, doing Blu-ray movie bundles from Sony Pictures. And that offer is going extremely well, being sold to a different segment of the market. A segment that's going in and buying a four to eight thousand dollar high-def screen, which sales as you know are going through the roof, and they're looking for something that can generate 1080p content. If you talk to retailers, they are very excited about the offer and we think we have the right strategy and we're giving the best value to the consumer.

Can you understand that people are upset when they see that Americans can own a PlayStation 3 for just US$499 - something like $400 cheaper than here? They have the option of getting into the PS3 market for price that is a lot cheaper.

This comes back to the argument about what the cost of living is in Australia compared to the US. I don't think there's a brand or a mass-market product that you can compare the US to Australia and not see mass-market benefits in the US.