OCT. 9, 2007 • Sony Computer Ent. dropped the price of two PlayStation 3 models in Japan by ¥5,000 ($43) each to better compete with the Wii. The 20GB system now retails for ¥44,980, and the 60GB PS3 will be sold for ¥54,980. On October 18^th in the U.S., Sony reduced the price point of the 80GB model from $599 to $499.  The new 40 GB model launched for $399 on November 2^nd.  According to ChartTrack in the U.K., PlayStation 3 sales jumped 178% following the debut of the less-expensive £279 40GB model. The surge subsided after three weeks, however, when unit sales level off back to pre-introduction averages.

Impact: In DFC Intelligence’s 2006 market forecast we stated that unless Sony could get the price of the PlayStation 3 to the $400 range by holiday 2007 they would end up in third place.  Sony clearly realizes this and is starting to be aggressive on pricing, even though it results in a major hit on the bottom line.  The price drop may not result in a huge sales surge this holiday season, but it is a clear sign that Sony plans to be aggressive on pricing.