Microsoft took two punches on Tuesday, one from Sony and a double hit from IBM and the consumer giant. Following a similar move by Microsoft, Sony Computer Entertainment America Inc. has slashed prices on its video game system, hoping to keep PlayStation"s market lead over Xbox. Effective yesterday, the PlayStation 2 has been lowered to a suggested retail price of $149, a $30 dip in price. Two weeks ago, Microsoft dropped its Xbox $30 to the same price point.
But this week"s news looks to keep the Xbox down. Microsoft made its price cut move hoping to up its 14 million unit sales in North America. Sony"s PlayStation, meanwhile, already sells to one in every four American households, with Sony expecting the price drop to fuel consumer uptake of PlayStation 2 and further its lead. "The consumer appetite for our system has been staggering -- over 90 percent of our original PlayStation sales came at $149 or less, and given our current 25 million installed base, the potential growth for PlayStation 2 is promising," said Jack Tretton, executive VP, Sony Computer Entertainment America, in a statement.