Sony Denies PS3 Price Cut Rumors - Then Recants

Sony's President, Ryoji Chubachi, stated that the PS3 is not going to incur any price cuts at present. It had been rumored that Sony would take advantage of reduced Blu-ray disc player manufacturing costs and extend the player price cuts to the PS3. It is already known that Sony is losing money on every console sold in order to build its brand and enable eventual sales of software titles to make up for the initial investment. With sales of the Nintendo Wii console outpacing PS3 by a margin of 3-to-1, Sony is taking longer than ever before to reach the market penetration it is looking for.

All of that changed when Sony released a surprising announcement on Monday that it was indeed cutting the PS3 by $100. Perhaps the board didn't give the President any alternatives.

Sluggish software releases haven't help and Sony could not anticipate the universal success of the lower-priced Wii console. It appears that any reduced manufacturing costs are going to offset the per-console losses Sony is sustaining. Sony's electronics division also includes the Bravia line, which to-date seems to be helping to carry the unit through this period.

Apparently, Sony was initially banking on enough future sales to sustain the brand and a repeat of the holiday-driven successes of the previous Playstation consoles. Back in 2000, many of the same complaints being leveled at the PS3 emerged when the PS2 arrived on the scene.

The difference this time around, of course, is that the Wii costs less than half as much and the Xbox 360 has far more titles.

Analysts were predicting that Sony was bound to drop the console by $100 or even as much as $150 by the end of the year. With the current price cut it will be interesting to see how much more wiggle room Sony has in time for the Christmas buying rush.