Sony Pushed Toward Early PS3 Price Cut

This column was originally published on RealMoney on March 20 at 2:16 p.m. EDT. It's being republished as a bonus for TheStreet.com readers. For more information about subscribing to RealMoney, please click here.

According to the latest numbers from the U.S. and Japan, sales of Sony's (SNE) PlayStation3 console are even weaker than the dismal January figures implied. An unusually early price cut may be Sony's best shot at salvaging the product's performance.

In the U.S., February's sales numbers issued last week by NPD Group underlined how weak a position Sony is in now. Nintendo's Wii sales dipped from 426,000 in January to 335,000 in February, while Sony's PS3 sales slumped from 244,000 in January to 127,000 in February.

The $600 price tag of the fully equipped PS3 is weighing heavily on Sony as U.S. consumers show some signs of spending caution. The size of PS3's slump relative to the Wii's decline is revealing, especially because the Wii had no particularly interesting new games debuting in February.

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In Japan, things are even worse. Since the beginning of the year, Sony has launched two major franchises to PS3: The latest "Monster Hunter" game has sold almost 1 million units on the PSP (Sony's handheld device), and the latest "Gundam" title has sold 200,000 units on PS3. Despite these major hits, PS3 unit sales slid to just 32,000 during the week of March 5-11, according to Media Create.

Sony's PSP sales were solid at 56,000 units, but the portable device is now fading rapidly against its chief rival Nintendo DS. Nintendo's Wii sold 44,000 units, and the Nintendo DS sold 108,000 units.

The March 5-11 week in Japan seems to imply that the February/March hit games did not give Sony's consoles a sustained lift. Just two to three weeks after major game launches, sales of both PS3 and PSP are dropping off more steeply than expected.

Longevity of games is another spot where Nintendo is trumping Sony on its home turf. In the latest week, several-months-old "Wii Sports" placed higher in Media Create's Top 10 chart than Sony's flagship "Gundam," which dropped to No. 7 in its second week. Similarly, the latest DS surprise hit "Professor Layton and the Mysterious Village" clings to the No. 3 slot four weeks after its debut. This is unusual -- and notably, both "Wii Sports" and "Professor Layton" are brand-new franchises.