Sony: Price cut more than doubles rate of Playstation 3 sales

July 26, 2007, 8:54 AM UTC

Jack Tretton, CEO of Sony Computer Entertainment America (SNE), told the San Jose Mercury News that the $100 price drop on the 60-gigabyte Playstation 3 caused the rate of sales to double. Retailers reporting a PS3 sales spike included Amazon.com (AMZN).

From the Mercury News interview:

The first piece of data that we had was from Amazon. They sold some 1,700 pieces in the first two days. We had some crazy 2500 percent lift. Each of the retailers had a minimum of a double. Double the sales. Just recently got some data from one of the retailers saying they were tracking 2.75 to 1 now over what they did last week. Our sustained lift on PlayStation Portable has been 90 percent since we dropped the price in April. Our goal would be a double long term but time will tell. The initial feedback has been great and it was before retail ads hit. [Click here for the full interview.]

This is clearly a mix of good and bad news for Sony, as it battles Microsoft’s (MSFT) Xbox 360 and Nintendo’s Wii. On one hand, any catalyst that doubles sales is nice. On the other, it’s more evidence that the Playstation 3’s high price – it was still $499 after the price drop – is keeping buyers away.

Pricing might not be such a problem if not for Nintendo’s risky, and so far successful, gambit with the Wii. Nintendo priced that console at $250, and since the holiday season the company has had trouble keeping it in stock. Meanwhile, Nintendo has gone from console market pariah to the top-selling console maker in the business.

Sony’s high-priced PS3 has delivered some benefits. In part because the PS3 includes the Sony-backed Blu-ray drive for high-definition video playback, Blu-ray has taken an early lead in installed base and movie studio support versus rival HD DVD.

But the true test of Blu-ray’s backing, and Sony’s staying power, may come this holiday season, as more consumers shop for high-definition players and game consoles. If low-cost HD DVD players hit the retail market and if Nintendo’s Wii continues to impress – and if Microsoft can overcome its Xbox reliability woes – Sony could find itself holding the bag.