Updated: Sony hopes $300 PS3 will boost sluggish sales

San Francisco (CA) – Sony has unveiled a slimmed down Playstation 3 at the Gamescom conference in Germany. The upgraded console will feature a 120GB HD and is expected to retail at $300 on September 1.

Sony executive Peter Dille defined the announcement as a “game changing moment.”

“We’ve had this date circled on our calendars for some time. We know price has been an issue for people,” explained Dille. “At $299, when you combine a state-of-art gaming machine, the best Blu-ray player on the market and the PlayStation Network, this is a great value.”

Although Sony had vehemently denied that a new price point was imminent, a number of analysts – including Michael Pachter of Wedbush Morgan – correctly anticipated the $100 cut.

“The core PS3 SKU has not seen a price cut since October 2007,” Pachter wrote on August 10. “We think that the negative software trend is less attributable to a weak software lineup, and can only conclude that until consumers are sufficiently interested in buying consoles, it will be difficult for publishers alone to drive sales higher each month. Fortunately, we anticipate imminent price cuts to occur soon.”

However, Doug Creutz of Cowen & Co. told the Wall Street Journal that Sony had already lost its lead in the gaming market.

“Historically, whenever someone cut a price, they had a big move. Last cycle, Sony had by far the market leadership, and they were leading the market price down. This time, they are lagging the market on price and have the least market share,” said Creutz. “They are already far behind. It can’t really get worse, but can they make up the difference?”

Michael Pachter adds:

Michael Pachter told TG Daily that Blu-ray drives and processor prices will become less expensive over time, which could help facilitate future price cuts.

“Generally, consumers are trained to wait for consoles priced below $200, but we are currently seeing a lot of pent up demand for a cheaper PS3,” said Pachter. “There is a lot of value to what Sony is offering now and we are likely see a giant bump in sales compared to last month. What will be interesting to see is if Xbox 360 sales are negatively affected by the move. Microsoft would then be prompted to do something to lower their current price points.”