PS3 sales are up 300% since Sony (SNE) cut prices on the devices by $100.
PS3 sales have run behind those of the Microsoft (MSFT) Xbox 360 and Nintendo Wii since Sony introduced the product. According to Reuters, the move up in sales will allow Sony to hit is fiscal year target of 13 million units shipped.
But, if PS3 sales are up, who wins and who loses?
The recession has driven down video console sales across all brands down, in some months by 30%. Microsoft dropped the price of the Xbox 360, so, in theory it should be picking up sales as well. An improvement for Sony and Microsoft would mean a net drop in units shipped for industry leader Nintendo. If that is correct, the price of the Wii could come down as early as the holiday sales season.
An old-fashioned price war may be heating up in the video game console business. The consumer may win, but with greatly compressed margins, the big three console companies could put themselves deeply into the red.
Douglas A. McIntyre
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