Despite comments to the contrary from the company president just a week ago, Sony on Monday cut the price of the 60GB PlayStation 3 by $100, while also introducing the 80GB version to North American consumers.
The announcement comes days before the annual E3 gaming event in Los Angeles, where competitor Microsoft may announce its own price cuts in response to Sony's moves. Nintendo, meanwhile, is widely expected to leave its own pricing untouched.
Analysts had been expecting a PS3 price cut from Sony for several months in light of the company's struggles in competing with the Wii and Xbox 360. However, in an interview with Reuters last week, company president Ryoji Chubachi said there were no plans to lower prices.
The change takes effect immediately and means the 60GB PS3 will run $499 USD. The new 80GB model will be introduced at $599 USD and include the game MotorStorm, but would not be available in the North American market until August.
"As we move into the next phase of PS3, it's important that we continue to evaluate our product line, offering consumers the technology and features that meet their growing needs for new forms of media and the way in which it is delivered," said Jack Tretton, president and CEO of SCEA.
The company had already begun selling the 80GB model in South Korea as part of the launch of the console there. However, it had sought FCC approval for the device in the US, indicating an eventual launch here.
Even at its new price, the PS3 is still twice as expensive as the Wii, which is dramatically outselling it in every major market. It is also $20 more expensive than Microsoft's Xbox 360 Elite, which includes a 120GB hard drive as part of the package.
Sony says that about 120 new PS3 game titles will be released in this fiscal year, which ends next June. It expects the price drop to cause sales to "double at a minimum," although some analysts expect a more modest 50 percent increase.
JupiterResearch vice president Michael Gartenberg says the console industry is driven by games, an area the PS3 has had trouble with, which makes new titles equally as important as any price cut.
"PS3 has not garnered the same success as prior versions. Sony faces Microsoft who has made the most of a one year head start in launch, as well as un-expected consumer interest in demand for the Wii. At the same time, Blu-Ray has not become a major purchase driver while the inclusion of the technology in all PS3s has forced Sony to keep the purchase price relatively high," he said.
"While price is still the prime purchase driver for consumers, game consoles are still fundamentally about games first and foremost," Gartenberg added. "As each vendors lineup is revealed later this week, we will have a better chance to asses how well each player will do this fall."
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