In addition to the much needed price drop, Sony announced that a new PlayStation 3 model with an 80GB hard drive, packed in with a full version of racing game MotorStorm, is expected to hit retail shelves in August for $599.
"Our initial expectation is that sales should double at a minimum," Jack Tretton, chief executive of Sony Computer Entertainment America, said in an interview. "We've gotten our production issues behind us on the PlayStation 3, reaching a position to pass on the savings to consumers, and our attitude is the sooner the better."
The PlayStation 3 has lagged in sales behind rival consoles since its launch. Nonetheless, Sony’s move comes as Microsoft’s Xbox 360 is inundated with reports of widespread product failures, allowing Sony a good chance to gain customers. Microsoft announced last week that it would extend the 360's warranty to 3 years, spending up to $1.15 billion to repair the machines.