Sony launches cheaper version of PS3

Sony began a new round of console wars on Tuesday when it unveiled a cut-price version of its PlayStation3 games console, in an effort to stimulate sales.

Speaking at the Gamescom trade show in Cologne, Germany, the Japanese consumer electronics company introduced the PS3 Slim, which will sell for €299 ($421), €100 less than current models. Sony is hoping this will help it make up ground against Nintendo, whose Wii console has dominated the market, and stimulate the games sector that is suffering in the downturn.

The “Slim”, which will be launched worldwide in September, will contain some of the same features as current PS3s, such as the BluRay Disc player. Sony has been keen to position the PS3 as more than just a games console. However, inclusion of these features has kept the manufacturing cost of the consoles high, and Sony has still not been able to bring its games division into profitability.

Sony has sold almost 24m of the consoles but still trails Microsoft’s Xbox 360 and Nintendo’s Wii in terms of units shipped.

The price cut will bring the PS3 – which currently retails at around £299 ($495) – closer to the price of its competitors. Nintendo’s Wii sells for £179 and the cheapest version of Microsoft’s XBox is priced at around £130. Microsoft is, however, rumoured to be mulling a price cut for the XBox.

“For some time the PS3 has looked out of line with its rivals and we’ve been surprised that Sony hasn’t reduced the price sooner,” said David Mercer, analyst at Strategy Analytics, the research firm.

“To stimulate the consumer mass market, to sell 10s or 100s of millions of units, you need to come under the £200 price tag,” said Ed Barton, senior analyst at Screen Digest, the research company.

The long-expected price cut is expected to result in at least a short-term spike in sales for Sony.

Sony introduced its previous PS2 games console at £299 in 2000, and then cut the price to under £200 a year later. Of the 10m consoles the company has sold in the UK, 80 per cent were sold at this lower price.

In May, Sony said it expected sales of the PS3 to rise 29 per cent to 13m this year.

“Our consumer panel research shows that there is a significant pent-up demand for the PS3, especially in Europe, and the main constraint has been price,” said Mr Barton. “The question is whether Sony can sustain that.”

Mr Barton said that much would depend on publishers coming out with a strong line-up of new games in the run-up to Christmas.

Big-name titles such as The Beatles: Rock Band may help stimulate demand.