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Sony Announces Cheaper PS3

Posted on: Wednesday, 19 August 2009, 06:20 CDT

Sony announced on Tuesday that it will be selling a slimmer, cheaper version of its PlayStation 3 game console next month, hoping to spark a sales jump to combat rivals Microsoft and Nintendo.

The Japanese company said that in September the latest, less bulky version of the PS3 would be rolled out at $299 in the U.S.

According to Reuters, this is a $100 price cut from the existing PS3 models, which run between $399 and $499 and have taken less market share than Microsoft's Xbox 360 and Nintendo's Wii.

"The main thing is that there is a significant price cut," said Ed Barton, analyst at Screen Digest. "We have argued since the beginning that there must be a substantial cut and this is a positive development."

Sony Computer Entertainment Chief Executive Kazuo Hirai said at the Gamescon video game trade show in Cologne, Germany that Sony's new PS3 comes with a 120 gigabyte hard disk, but consumes 34 percent less power than the original model and is 32 percent smaller.

"In 2004, as you may recall, we launched a slim version of PlayStation 2, a defining moment for that console, helping us to really expand the user base of PlayStation 2 further," Hirai said. "Today is that day for PlayStation 3."

The price cut comes weeks after Activision Blizzard Inc. CEO Robert Kotick said that lowering console prices would spark the slumping sector.

Jesse Divnich, an analyst at Electronic Entertainment Design and Research, said that he is expecting PS3 sales to increase a minimum of 20 percent in September.

He said that Microsoft would most likely cut the price of its higher-end model from $399 to $299.  He also said that Nintendo's Wii is in need of either a price cut or a hardware or software bundle.

"The Xbox 360 does have stronger momentum right now than the PS3, so it's going to take at least two months before I consider these systems to be at an equal level because it just takes some time for consumers to react to things like price cuts," he said.

Price cuts are not unusual for video game consoles after they have been out on the market for a while.  Microsoft's sales got a boost last September when it dropped the price of its Xbox 360 by about $50.   Now the Xbox 360 sells in three different models ranging from $199 to $399.

"A smaller console size does not necessarily mean more value for consumers. Starting at $199, Xbox 360 offers the best gaming and entertainment experience at the most consumer-friendly price on the market," Microsoft said in an emailed statement when asked about a comment on Sony's move and about a potential price cut for the Xbox 360.

According to Reuters, Nintendo did not comment about Sony's announcement.

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On the Net:

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Source: redOrbit Staff & Wire Reports

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