MAY 3, 2010 • It’s going to be a long console cycle after all. With the prospect of a replacement for the PlayStation 3 many years away, Sony Computer Entertainment America introduced a new PlayStation 3 extended warranty plan for owners of the systems.  One year ($44.99) and two year ($59.99) warranty extensions are available. PlayStation Portable owners are also eligible for one year ($29.99) and two year ($39.99) extended warranties. But consumers must extend their coverage before their manufacturer’s warranties run out. PSP owners can also purchase an Accidental Damage Plan for one year ($39.99) or two years ($49.99) that covers cracked screen damage. PSP owners must purchase the plan within 30 days of buying their units.

Impact:  Protection plans are very profitable and both retailers and manufacturers look to these as a way to increase profitability on low margin consumer electronics.  Sony estimates about 25% of consumers purchase a warranty at retail.  Sony’s new plan is designed for the 75% that get home without having purchased a warranty.  The company estimates that less than 10% of consumers will purchase the warranty.