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PS3, Xbox 360 Price Cuts Drive Sales — Will Nintendo Cave And Slash Wii Pricing, Too?

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Back-to-back $100 price drops from *Sony* and *Microsoft* for the PS3 and Xbox, respectively, pumped up sales of both consoles in just over a week. Sony (NYSE: SNE) sold just over 75,900 PS3s — more than double the number of units it sold the previous week — and up 16 percent vs. the same week last year. Gamers bought around 74,700 Xbox 360 units, up 32 percent vs. the previous week, and 49 percent year-over-year.

The sales boost comes amid a five-month slump in video game sales overall, and the only company left out of the rebound was Nintendo. VGChartz reports that Wii sales continued to decline: down just five percent vs. the previous week, but down 46 percent year-over-year.

Back in April, game industry execs hinted that Nintendo might need to come down on the Wii’s price to help counter what appeared to be dwindling demand for its “casual” gaming experience; the price cuts by Sony and Microsoft (NSDQ: MSFT) make their consoles’ upgraded graphics and wider variety of games seem like an even better value proposition.

Sony’s decision to cut the PS3’s price could be described as tortured. Analysts and even *Activision* CEO Bobby Kotick called for the reduction for months before it happened, but the company only recently started breaking even on the console’s production costs, and had to try to eke out as much profit as possible. Getting Nintendo to cut the Wii’s price to spark sales may not be as difficult though — as analysts suggest that the console’s production costs have already fallen by as much as half since its launch in 2006.