Sony's PS3 Clearance Sale

Sony (NYSE: SNE  ) may be in hot water with consumers yet again. It turns out that the company's recent price cut on the 60 GB PlayStation 3 wasn't the whole story -- Sony apparently plans to phase out the model entirely. Call it a clearance sale.

If you recall, Sony announced last week that it would cutting the price on its 60 GB PS3, shortly after a high-ranking company executive said a price cut was not planned. However, phasing out the model entirely, leaving only the 80 GB model available at $599, seems a little different than cutting sticker-shocked consumers a break.

Sony and Microsoft (Nasdaq: MSFT  ) are duking it out for hardcore gamers, with their respective PS3 and Xbox 360 consoles offering many whiz-bang features that make them a neat addition to the modern living room. However, Nintendo's Wii has made it clear that a lot of consumers are reacting very well to a low-priced, simple alternative in video games. PS3 prices have long been criticized as nosebleed-inducingly high, but now Sony seems to be pushing a "Get it while it's hot and cheaper!" angle to drive sales of the 60 GB model.  

Several of Sony's moves over the last couple of years haven't exactly engendered consumers' goodwill. Rootkits, fake blogs -- is this the right way to treat customers? The Financial Times reported that Sony's phaseout resulted in consumer rants on gaming sites.

Can the short-lived discount possibly be good for the Sony brand? In another interesting note this week, Sony lost its top spot on a Harris Interactive consumer brand survey to Coca-Cola (NYSE: KO  ) , after seven straight years at No. 1. Then again, Sony shareholders might take some comfort in knowing that it's still holding on at No. 2, despite its many recent consumer-galling mistakes.

CNET sought out Sony's side of the story. The company said that there's still plenty of the 60 GB models around, and it didn't rule out the idea of a later price cut on the higher-end version, once it evaluates the market.

Still, Sony shareholders, or anybody who's considering the stock, should think long and hard about its recent PR blunders. In addition to suggesting serious strategy confusion at Sony, their effect on consumers' opinions of the company's motives shouldn't be ignored.

Keep the game going with this Foolish content:

Microsoft and Coke are Motley Fool Inside Value recommendations. Nintendo is a Motley Fool Stock Advisor pick. CNET is a Motley Fool Rule Breakers selection. A free 30-day trial to any of these newsletters will boost your portfolio.

Alyce Lomax does not own shares of any of the companies mentioned. The Motley Fool has a disclosure policy that appeals to all gamers alike.


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