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PlayStation 3 price cut by US$100

Sony Corp, the world's biggest maker of video-game consoles, cut the US price of a PlayStation 3 model by 17 percent and introduced a less expensive version to spur holiday sales.

The PlayStation 3 with an 80-gigabyte hard drive was cut to US$499 from US$599, Jack Tretton, head of Tokyo-based Sony's US video-game unit, said in an interview. The reduced price is effective immediately, Sony said in a statement today. The company also introduced a US$399 model with 40 gigabytes of storage that goes on sale Nov. 2.

Sony is taking the steps to narrow the price gap with Nintendo Co's Wii and Microsoft Corp's Xbox 360.

PlayStation 3, which includes a high-definition Blu-ray movie player, is the most expensive game console. Wii sales in the US have more than doubled those of Play-Station 3 since the two machines were introduced last November. Sales also trail Xbox 360, which got a boost this month from the release of the Halo 3 video game.

"Without this, it wasn't looking like there would be much action for PlayStation 3 this holiday," Billy Pidgeon, an analyst at research firm IDC in Framingham, Massachusetts, said in an interview. "This is going to make retailers very happy."

Lower prices may lift holiday PlayStation 3 sales as much as 50 percent by attracting avid game players and consumers shopping for a high-definition DVD player, said Michael Pachter, an analyst with Wedbush Morgan Securities in Los Angeles.

The US$399 model comes with a Blu-ray DVD of Spider-Man, highlighting the console's movie-playing abilities.

"Putting a movie inside the box is very smart," Pachter said.

Sony may sell as many as 450,000 PlayStation 3 consoles next month and almost 1 million in December, Pachter said.

Consumers have purchased 6.3 million Xbox 360s, introduced a year earlier, according to NPD Group Inc, a Port Washington, New York-based researcher.

Tretton said Sony's holiday marketing will stress the Blu-ray player in addition to game play. He declined to say how much the company will spend.

Sony may need to cut prices again to catch up with the more than 120 million PlayStation 2s (PS2) sold worldwide, Pachter said.

About 90 percent of PS2 consoles were sold after prices fell to US$199 or less, Pachter said. The PlayStation 2, priced at about US$129, still outsells PlayStation 3. In August, consumers purchased 202,000 of the consoles, compared with 130,600 PlayStation 3s, according to NPD.
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