PriceSCAN Blog

Sony sold the PlayStation 3 at a loss in a gambit to seize market share, yet even at the price of lost profits, dominance of the game space has proved elusive. Now, published reports have Sony contemplating further price cuts, and it's easy to see why. Just as the Japanese electronics giant's quarterly results were dragged down by the PS3, Nintendo has been riding high on the success of its motion-sensing entrant in the video game console sweepstakes. The Wii remote's capacity to become a sword, gun, racket etc. (not to mention a potential source of damage to humans, screens, wall, and, occasionally, pets, as chronicled by the fan site wiihaveaproblem.com) has captured the imagination of gamers. More importantly, the PS3 is about twice as expensive as the Wii, meaning by going Nintendo a parent can be a hero while spending half as much.
To be sure, the PS3 is a very advanced machine, with its Cell processor and Blu-ray HD drive. But high def fans can now by a 1080p Xbox 360 HD-DVD drive - see "So Xbox Has A 1080p HD-DVD – Blu-ray's Still A Cooler Name (You Can Tell By The Dropped Vowel)". It runs just under $200, which when added to the approximately $300 or $400 for the Xbox 360 Core or Xbox 360 Premium, respectively, is still cheaper than the nearly $700 that the PS3 – 60 GB system is going for. So even at the higher end, Sony finds itself at a price disadvantage.
Dropping the PS3's price to compete with the Xbox, let alone the far cheaper Wii, will only deepen the per unit loss Sony faces as it tries to gain acceptance for its console. But the PS3 is an important part of Sony's efforts to secure the dominance of its Blu-ray standard, and so we may soon see the firm bite the bullet, or, more appropriately, the remote.