TOKYO, Japan (TP) — Sony’s computer entertainment division announced Wednesday it will lower the price of its PlayStation 3 console to $199.99 to help boost slacking sales. Sony hopes the price cut, which takes effect Wednesday, will sustain the life of the PS3 and is also bundling the system with the Nintendo Wii in an efforts to win back the gaming community.
Critics contend Sony needed to lower its PS3 prices for a number of reasons, starting with staying competitive with every other manufacturer.
PS3 price-cut pressure increased in February, when analysts said Sony might not reach its goal of selling 1 million PS3 consoles through March without a price reduction, as sales for the hardware dropped despite significant gains by competitors.
Meanwhile, the company is in the midst of a major restructuring – shedding 16,000 jobs worldwide – in an effort to reverse its fortunes and mismanagement. Sony is still losing money on every PS3 it sells at $399, so a price cut could hurt the games division, analysts say. And adding a competitor like Nintendo to their debt will be costly but not as expensive as not selling any units at all.
“In our view, this action would have a much greater impact on the PS3 than the Wii,” Sony spokesman Dave Duncan noted. “Of course the addition of the Wii hurts our bottom line and helps out Nintendo but people will buy the Wii’s regardless. We like to think of it more as getting a Blu-Ray player with your Wii.”