Sony cuts PlayStation 3 price, aims to double sales

July 9 (Bloomberg)—Sony Corp., the world's biggest game- console maker, cut the price of the PlayStation 3 in the U.S. by $100, or 17 percent, after sales trailed Nintendo Co.'s Wii and Microsoft Corp.'s Xbox 360.

A PlayStation with a 60-gigabyte hard drive will sell for $499 starting today, helping double U.S. sales, Jack Tretton, head of Tokyo-based Sony's U.S. games unit, said in an interview. A new 80-gigabyte model will go on sale in August for $599.

Lower prices will allow Sony to target users of Microsoft's $479 Xbox 360 Elite model to increase sales and help narrow losses at the PlayStation unit, analysts said. Nintendo's Wii, the top-selling console at $249, probably won't be affected.

"The price cut is unlikely to help the company dramatically expand its market share," Seiichiro Iwamoto, who helps oversee the equivalent of $809 million at Mizuho Asset Management Co. in Tokyo. "There is still a large price gap."

U.S. consumers have purchased 1.38 million PlayStation 3s since it was introduced in November. That compares with 2.84 million Wii players, which reached stores the same month. Microsoft sold 5.5 million units of the Xbox 360, introduced a year earlier, according to New York-based NPD Group Inc., which tracks sales.

"A lot of sales that would have gone to the Xbox Elite will go to PlayStation" after the price cut, Richard Doherty, an analyst at the research firm Envisioneering Group in Seaford, New York.

E3 Games Show

Sony said in May that higher sales and lower production costs will help reduce losses at the game division by almost 80 percent this fiscal year to 50 billion yen ($405 million) after a record loss. President Ryoji Chubachi said as recently as July 6 that Sony had no plans to cut PlayStation 3 prices.

The company made its announcement one day before the opening of the Electronic Entertainment Expo, or E3, conference in Santa Monica, California, where console makers and game publishers announce new products for the coming year.

The conference opens tomorrow night with a press briefing by Redmond, Washington-based Microsoft. Kyoto, Japan-based Nintendo and Sony have scheduled events for the following day.

Sony will also lower the price of the PlayStation 3 in Canada to C$549, a C$110 discount, for the 60-gigabyte model.