Sony can't cut price on a device already losing money says analyst

Sony, Nintendo, and Microsoft are fighting for the dollars of gamers around the globe. The sales pecking order in the gaming console market is well defined with Nintendo in first, Microsoft in second, and Sony bringing up third place.

Many in the industry say the reason that Sony is lagging behind Microsoft and Nintendo in sales is because of the $400 price tag. At that price, it is much more expensive than the Wii ($250) and Xbox 360 ($200 base). Game developers and others in the industry are putting pressure on Sony to drop the price of its console.

Sony CEO Kazuo Hirai said in an interview at E3 that Sony would not drop the price of the PS3 at this point. Hirai said, "We’re very happy with the price point that we have. We will move when we think it’s appropriate at some point in time."

The clear sales leader in game consoles is Nintendo who has moved over 50 million consoles. The Microsoft Xbox 360 has sold 30 million units so far while Sony has been able to move only 22.7 million PS3 consoles.

Analyst Yoshio Takahasi told Bloomberg, "Sony is probably determining the price of the PS3 by taking into account progress in cost reduction. The PS3 hardware business hasn’t turned profitable and if you lower the price without cutting expenses, you’ll lose more money.”

Sony's game division is losing money on each PS3 sold today and has posted a loss of $609 million for the year ended March 31, 2009. Sony is forecasting a second straight year of net loss blamed on the global economic recession. Sony maintains that it met its yearly goal for PS3 shipments and expects to ship 13 million PS3s in the 12 months ending March 2010.

In the same period, Nintendo is forecasting it will sell 26 million Wii consoles.

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