Sony Poised for Holiday Gains as PS3 Sales Double

Sony’s pricing gambit has finally helped light a fire under sales of its PlayStation 3 model, with the electronics giant reportedly sellingtwice as many consoles in the U.S. last week as the prior week.

Sony recently launched a 40 GB version of the PS3 priced at US$400, more than $100 less than the reduced price tag on the 80 GB version, which still sells more around $500.

The result was more than 100,000 units sold during the week of Nov. 5, Sony CEO Howard Stringer told The Associated Press.

Sales Surge

That is more than double and in some cases as much as three times the numbers being sold during much of September and October, according to data from NPD Group, which said Sony sold 119,000 PS3 units during the entire month of September.

The sales surge was the hoped-for outcome of the risky pricing moves, Stringer told the AP. However, he acknowledged the company was not sure it would see such a rapid response.

The spike in sales comes at a critical time, with the PS3 and Sony’s older PS2 vying for a spot on holiday wish lists with the Nintendo Wii– last year’s smash gaming console hit — and Microsoft’s Xbox 360, which has seen strong sales for much of this year on the strength of new gaming titles.

Wii’s Pain Is Sony’s Gain

In fact, the PS3 may also be benefiting from a relative shortage of Wii consoles in U.S. stores. Nintendo is reportedly selling those consoles as fast as it can ship them to retailers. Stringer acknowledged as much in his interview with the wire service, calling the shortages “fortuitous” for his company.

Overall, Microsoft remains the big winner in the next-generationconsole wars to this point, having sold 11.6 million of its Xbox 360 device compared to 9.3 million units for the Wii and around 5 million for the PS3. Nintendo has said it will have shipped 14 million Wiis by the end of this year, however, suggesting it is gaining on the Xbox.

Sony’s PS2 had, until recently, continued to outsell its successor, which — along with price cuts from Microsoft on the Xbox in some markets, including Japan — helped prompt the price cuts from Sony.

Sony’s pricing considerations are complex, Yankee Group analyst MikeGoodman told the E-Commerce Times, because the PS3 includes a built-in Blu-ray DVD player. Sony is trying to build adoption rates for that standard, which competes with HD-DVD.

“Sony doesn’t want to lose buckets of money in its gaming unit, but it has other things to take into account as well,” Goodman said. “And it saw the Wii doing very well at a much lower price point and maintaining momentum for this holiday. It had to hope that price cut did the trick before the peak shopping season.”

Short Cuts

Sony’s price cut was somewhat surprising because it was announced just a few months into the life cycle of the device, said JupiterResearch analyst Michael Gartenberg. Many gaming consoles have their prices slashed as the next platform is being readied, but that’s not the case with the PS3, which will be the flagship of the Sony lineup for at least a couple more years.

The cuts also suggest a shift away from hard-core gamers as a target audience and toward mainstream users. The Wii’s popularity underscoresthe growth of so-called casual gamers, who are less likely to rush out and be the first to plunk down $500 or more for a gaming console and who are more interested in family friendly gaming titles than the adventure and battle games that have driven high-end console sales in the past.

“The success of the Wii took everyone — including Sony — by surprise,” Gartenberg said. At the same time, the inclusion of Blu-ray DVD players in the PS3 has not proven to be the lure Sony had expected, he added.

Sony’s best hope is that consumers start to embrace the games lineup for the PS3. “Price is a prime purchase driver, but games sell game consoles,” Gartenberg said.