According to a widely publicized report by the Associated Press, Sony sold more than 100,000 PS3 consoles during the first two weeks of November, making it one of the best sales periods for the struggling game console. Sales for the PS3 have been lagging behind its rivals, Microsoft's Xbox 360 and Nintendo's surprise hit, the Wii.
Last quarter, Sony's gaming division reported a staggering $848 million in losses, double what the division reported the year before. Although the PS3 has received good reviews for its performance and comes equipped with a Blu-ray DVD player, the relatively high cost of the device has discouraged consumers, particularly given the lower cost of the Wii.
The decision by Sony to boost sales in part by cutting the price of its 80-GB PS3 is somewhat ironic, given that its main rival in the high definition DVD wars, Toshiba, recently sold nearly an identical number of HD DVD players (the rival to the Sony-backed Blu-Ray) by running a well-publicized $99 sale for its soon-to-be replaced, second-gen HD DVD player.
When asked earlier this week by Business Week's Stephen J. Adler if he was surprised that Toshiba was selling its high-def DVD player for so little, Stringer said he wasn't. "Look, I can sell [a DVD player] for a dollar," Stringer replied. "I'd lose a lot of money, but if you want to go that route, it's a tough competition, and it seems to be about a lot of things, including face. So if you want to cut the price down and engage us in a price war, that's a different system."
Clearly, for Sony, after months of third-place finishes in the gaming console battles and staggering losses, a little price war is not necessarily a bad thing. Whether it is a sustainable business model will depend in large part on whether Nintendo can get back on its feet before the holiday rush.