PS3 $100 price cut arrives with hopes of a turnaround

Stan Beer
Monday, 09 July 2007 12:06

Your IT - Entertainment

As market watchers have predicted, Sony has dropped the price of its Playstation 3 console by US$100 ahead of the E3 expo in Santa Monica this week. The cut was widely expected but some had thought Sony may wait until closer to the holiday shopping season. The price cut has taken the PS3 60GB down to US$499 while a new 80GB model will fill the previous US$599 slot.

It is not yet known when the price drop will be replicated in markets outside the US. A spokesperson for Sony Computer Entertainment Australia told iTWire that no plans for a similar price cut in Australia had yet been made known to the local office.

Sony believes that the price drop in the US will boost sales by 100% and help the company to start to claw back lost ground from its rivals the Nintendo Wii and Microsoft's Xbox 360.

The PS3 is estimated to have sold about 4 million units worldwide, compared to more than 8 million Wii and 12 million Xbox 360. While the Wii continues to sell at a cracking pace, serious quality control issues with the Xbox 360 are starting to impact sales

At US$499, the PS3 is once again the equal cheapest Blu-ray player on the market. The Blu-ray factor has definitely helped PS3 sales in Australia where HD flat panel TV sales are ramping up in a big way. Staff at two of the biggest Australian consumer electronics outlets JB Hi-Fi and Harvey Norman have reported selling more PS3 units as Blu-ray players than as games consoles.

While the PS3 is still double the price of the Wii even with the price cut, the gap has narrowed considerably with Xbox 360 putting the pressure on Microsoft to follow suit announce its own cut. However, Microsoft is already spending more than US$1 billion to address its Xbox 360 hardware failure issues.

The E3 show this year is expected to be a showcase for a number of new exclusive games titles for PS3, which has suffered since its launch from a lack of titles that can exploit the console's much vaunted Cell processor power. Last year's E3 was a big disappointment for Sony as the media largely focussed on the PS3's high price tag while the Wii stole the limelight.

Sony has promised hundreds of new games for the PS3 in the coming year and if more than a few of the games on display at E3 this year live up to expectations, together with the price cut, it could mark the beginning of a turnaround in Sony's fortunes.