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Sony Discontinuing Newly Reduced PS3

17 Jul, 2007 By: John Gaudiosi

Sony is discontinuing its reduced-price PS3.

Sony Computer Entertainment America (SCEA) will be switching from its current dual-model PlayStation 3 plan to a single PS3 as early as this holiday. Sony has confirmed that it is discontinuing the newly discounted $500 60GB PS3, but the company has ample supply for “several months to come.”

While Sony hasn't commented on what would happen after that time, analysts Michael Pachter of Wedbush Morgan Securities believes one PS3 will emerge.

Pachter believes Sony will keep the $500 price point for the PS3 and sell the 80GB hardware, minus the free Motorstorm game, at that price. Next month, Sony will debut the 80GB PS3 with Motorstorm bundle in North America.

SCEA President Kaz Hirai said in an interview with Norwegian game site VG Multimedia that “Once that product [the 60GB PS3] is gone from retailers' shelves, then we're back to the $600 SKU only.”

“It's not like we have a two-price strategy here in the U.S. market,” he told the site. “We found out very early on that consumers react mostly to having one SKU as opposed to two.”

The statement contradicts the press release that came out the week of the E3 show that touted the price cut. Sony announcements also touted spiked sales of the $500 PS3 since the cut.

Pachter believes the $500 price will remain and Sony will introduce the 80GB PS3 at that price as soon as the 60GB models have sold out. Sony has stopped production of the 60GB PS3.

Beginning some time in 2008, Pachter believes the one-SKU PS3 will be reduced to $400 by Sony. Sony is not commenting on future price points.

Pachter also believes Microsoft will cut the price of its Xbox 360 by $50. Many analysts expected Microsoft to use E3 to announce the new price points for its three models, but because of the extended warranty on the hardware, which cost the company $1 billion, Microsoft held back on this news, Pachter believes. He said Microsoft didn't want to send the message that the hardware was defective and a price cut was needed to move the consoles.

Microsoft is expected to announce its price cuts before the busy holiday season to give its hardware a boost.

Nintendo will keep the $250 price point for its Wii. Wii is currently the hottest-selling console of the three and systems have sold out every week since launch in all territories. As a result, Nintendo has no need to cut its hardware prices.

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