Sony offers cut-rate PlayStation 3

Instead of simply cutting prices on current versions of the Sony (NYSE: SNE) PlayStation 3 to improve sales in the U.S., the company will sell a less powerful version of the game platform at a lower price. The new version of the PS3 will come with a 40-gigabyte hard drive and cost $400, and Reuters writes that Sony will also cut the cost of its current model from $600 to $500. The more expensive model has an 80-gigabyte drive.

The price cut had been rumored but the question is: why did it take so long?

Sony PS3 sales have trailed sales of Microsoft (NASDAQ: MSFT)'s Xbox 360 and the Nintendo Wii in most markets around the world. One reason is a lack of new games for the Sony platform. The other is that the PS3 is more expensive than its two competitors, and Microsoft has been willing to cut pricing.

Sony's move will long be considered a major tactical blunder. After owning the video game market with its PS2 platform, its next generation machine was over-featured and overpriced. The PS3 is set up to allow for features like HD playback of video, a feature that many gamers probably do not want.

With a price cut coming fairly late in the year, Sony has already lost part of the sweet spot in a selling season where it could have made up some ground on the competition.

Douglas A. McIntyre is an editor at 247wallst.com