Sony slashes PS3 price to $500

Culver City (CA) - Just two days ahead of its E3 press briefing, Sony has brought the price of the Playstation 3 down from $600 to $500. An 80 GB model is also now slated for the U.S.

The new price is effective as of today, July 9. It’s a move that now puts new attention on Sony for this week’s E3 Media & Business Summit, which officially kicks off on Wednesday.

News began circulating last week that retailers had begun adding a new SKU (stock keeping unit) for the $500 unit, but Sony refused to comment on the prospect of an official price cut. Sony president Ryoji Chubachi even told Reuters in an interview, "At present, we have no plans," just a few days ago.

The new price is the same as the launch date price for the now defunct 20 GB PS3. The current model has a 60 GB hard drive. To fill the void set by the discontinued 20 GB console, Sony also announced that it is working on bringing an 80 GB model to the US. Already deployed in South Korea, the 80 GB model would bring Sony a bit closer in the HDD wars against Microsoft, which launched a new Xbox 360 with a 120 GB hard drive in April. The new PS3 will take over the 60 GB model’s former price point of $600 when it goes on sale next month.

Less than eight months after its release, the PS3’s price drop is one of the quickest in recent console generations. The typical length of time between a new system and its first price cut is around a year and a half. Nintendo’s Gamecube, which premiered at around $200, didn’t see a price drop until about 17 months after its November 2001 debut. Likewise, its handheld gaming device the Game Boy Advance stood at $100 for 21 months before getting a modest cut to $80.

Sony’s own PS2 stuck at its initial MSRP of $300 for over 18 months before it dropped down by $100.

However, Microsoft’s Xbox, plagued by many of the same problems as the PS3, lived just six months at a $300 retail price, and then was cut down to $200. The Xbox 360, on the other hand, has yet to see a price change from its $400 beginning price set in November 2005.

Current estimates at Nextgenwars.com show the PS3 well behind its two competitors. The site states that around 3.6 million PS3 consoles have been sold worldwide, compared to 8.6 million Wii units and 11.4 million Xbox 360s.