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8/20/2009
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Sony PS3 Sales May Surge After Price Cut

NPD Group says it expects sales to increase 40-60%, following a price cut to $299 that will attract "the next segment of price-conscious consumers."

Sony's decision to slash the price of the PlayStation 3 will likely boost unit sales at U.S. retailers by as much as 60% in September, a research firm said Thursday.

The $100 price cut announced Tuesday in conjunction with Sony's release of a slimmer, more power-efficient version of the PS3 is exactly what was needed to reinvigorate the platform, which has lagged in unit sales behind Nintendo's Wii and Microsoft's Xbox 360, The NPD Group said.

"The $299 price point is important to getting to a point where the next segment of price-conscious consumers can jump into the market and it most certainly will re-energize sales of the platform," NPD analyst Anita Frazier told InformationWeek in an interview via e-mail. "We would expect to see in the range of a 40% to 60% unit sales increase when September sales are reported."

However, price cuts alone may not significantly narrow the sales gap between the PS3 and rivals. Another important factor will be whether a new, hot video game is also released.

"Content is still the key motivator of a hardware purchase decision," Frazier said. "Other systems might too take a price cut, so there's a lot playing into which system tops sales any particular month."

Sony dropped the price of the PS3 with an 80 GB hard drive to $300 and the model with a 160 GB hard drive to $400. The new PS 3 Slim, which is scheduled for release Sept. 1 with a 120 GB hard drive, will also cost $300.

The new price matches the Xbox 360's, but is $50 higher than the Wii. However, the higher prices for the XBox and PS3 are reflections of those two products being more powerful systems for serious gamers. In targeting the Wii at more casual gamers, Nintendo has outsold Microsoft and Sony in terms of unit sales.

Industry analysts have said for some tim that Sony needed to drop prices. The company in July reported that unit sales of the PS 3 fell more than 31% in the quarter ended June 30, compared to the same period a year ago.

The U.S. video-game industry as a whole has suffered during the economic recession. In July, the industry reported its fifth consecutive month of declining sales, according to NPD Group. Console sales overall fell 37% in July from the same month a year ago.

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