Sony Plays Well

Nintendo's Wii (NTDOY) and Microsoft's (MSFT - Analyst Report) Xbox 360 have always imposed tough challenges for Sony’s (SNE - Snapshot Report) Playstation 3. These three are the most well-known products in the gaming space. But recently Sony came up with an enhanced version of the Playstation 3, and reduced the price of the product by $100.
 
Previously, with delays in the launch and lesser volume of production of PlayStation game console, Sony lagged behind the competition, which has resulted in the loss of market share, and we have been expecting a price cut of its Playstation 3, as a means of stimulating sales. This move by Sony will impose some pressure on Microsoft and Nintendo, to reduce prices of their gaming consoles and thereby set a price decline trend in the whole gaming space.
 
This apart, the new version of the Playstation 3 comes with some enhanced features, including high definition graphics and Blu-Ray compatiility. This will keep the product ahead of Nintendo's Wii. Keeping pace with Nintendo's Wii, Sony has incorporated motion-control technology in the new version. During a recessionary phase, price cut is the main criterion to push a product into the market. Although the price cut does not ensure whether Sony will be able to achieve its 13 million unit sales target by the end of the year.
 
Price cuts are a very common competitive strategy for video game console makers. Microsoft stimulated its sales last September after the company decided to reduce its prices on some of its Xbox 360 consoles by $50. This goes to show that price reduction strategies work for gaming companies. This apart, the ever increasing number of gaming enthusiasts around the world offers good opportunity for popular gaming brands like Sony. So it can be safely inferred that Sony is efficiently managing the business of gaming.

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