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Analyst: Sony to Cut PlayStation 3 Price $100 in August

16 Jun, 2009 By: Erik Gruenwedel

Expect Sony Computer Entertainment of America (SCEA) to cut $100 from the $399.99 retail price for the PlayStation 3 console prior to the Aug. 18 rollout of perennial football video game favorite Madden NFL 2010 from Electronic Arts, among others, an analyst says.

Arvind Bhatia, media analyst with Sterne Agee in Dallas, says the PS3, which includes a Blu-ray drive, is key to Sony’s previously stated goal to increase console business by 30% in 2009.

“That’s not going to happen unless they lower the price significantly,” Bhatia said. “It’s widely known that a price cut is going to happen; it’s a question of when and how much.”

Sony Corp. in March reported its first annual net loss ($98.9 million) in 14 years, including an 18% sales decline in its games unit.

Jack Tretton, president and CEO of SCEA, reportedly told CNBC the company would not be pressured to reduce PS3 prices prior to the 2009 holiday season.

A price reduction, however, would segue well with a compelling second half 2009 game release slate spearheaded by titles such as The Beatles: Rock Band and Modern Warfare 2, among others.

Sony in April cut the price of its top-selling PlayStation 2 game console from $129.99 to $99.99. Introduced in 2000, the PS2 has sold 136 million units worldwide, easily the all-time top console seller. The PS2 is widely credited with helping the DVD boom because it included a DVD player.

Sony has been phasing out the system in favor of its high-def PlayStation 3 model, but the PS2 was still the most played console of 2008, according to Nielsen, accounting for 31.7% of gamers’ time.

Separately, Michael Pachter, analyst with Wedbush Morgan Securities in Los Angeles, told The Wall Street Journal Nintendo would be pressured to reduce the price of the Wii to $200 (from $249.50) if it did not ship 26 million units by March 31, 2010.

The NPD Group last week reported that Wii sales fell 57% in May, underscored by a 23% revenue drop in the overall game industry.

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