Shares in Sony slid today after the company said it would cut the price of its Playstation 3 video game console.
Incoming chief executive of Sony Computer Entertainment Andrew House said it was dropping the cost of the basic PlayStation 3 gaming console by €50, a move that could lift the industry by boosting video game sales ahead of the holiday season.
Sony is also hoping to regain lost ground from its main rival, Microsoft, which makes the Xbox. It announced the cuts a week after sales for new games suffered their lowest month in nearly five years, according to retail research firm NPD.
The price tag on the 160 GB version of PlayStation 3 is now €249, down from €299. In the US and Japan, the console's price also has been slashed to $249 and 24,980 yen from $299 and 29,980 yen, respectively.
And the larger-storage 320 GB version of the PlayStation console - which also competes with Nintendo's Wii - now sells for €299 versus €349 originally.
In the US, the 320 GB version now costs $299 and 29,980 yen in their respective markets, from $349 and 34,980 yen previously.
Sony said the new pricing would take immediate effect in Europe and start on August 18th in Japan.
The price cut may help publishers such as Electronic Arts, retailers and makers of video game accessories.
"It is safe to assume that confidence across the entire industry just lifted," said Jesse Divnich, an analyst at EEDAR, a video game retail research firm.
Sony, which has been recovering from a massive hacking attack that turned up serious security flaws on its PlayStation network, said at a news conference it was lowering prices on the eve of Gamescom, Europe's largest video games show.
"Historically, we've seen sales increases from our price drops and we expect to see the same here." said Jack Tretton, chief executive of Sony's US PlayStation unit in an interview.
The Japanese company, which once dominated consumer electronics globally, also plans to release this year a new, slimmed-down and cheaper version of its PlayStation Portable (PSP) handheld device in Europe only. The new device will cost €99 and will not have Wi-Fi access.
Sony's biggest current bet is the Vita, a light-weight handheld device. Game blogs have lit up with criticism over its launch date and price. It will face a tough fight from Nintendo, which lowered the price of its handheld 3DS more than 30 per cent only four months after it hit stores in the United States.
Yet Mr Tretton said the data he has seen on buyer intentions for the Vita, as well as the reaction from developers and retailers, has been "universally positive".
Sony dismissed notions that consumers are unwilling to pay for a handheld games device when they may already play games on their phones.
"If you look at the gaming and social gaming experience on Vita, you will never confuse it with a gaming experience on the mobile phone. They are a far cry from each other," Mr Tretton added.
Reuters
