Sony cuts price of PSP handheld video game device

A Sony employee demonstrates a PlayStation Portable (PSP) in Tokyo July 12, 2004. Sony Computer Entertainment America said on Tuesday it will cut the price of its handheld PlayStation Portable game device 15 percent, or $30, to about $170 as it battles Nintendo Co. Ltd.'s rival DS handheld.

LOS ANGELES (Reuters) - Sony Computer Entertainment America said on Tuesday it will cut the price of its handheld PlayStation Portable game device 15 percent, or $30, to about $170 as it battles Nintendo Co. Ltd.'s (7974.OS) rival DS handheld.

"The PSP needed a price cut to reinvigorate the market. Wal-Mart (WMT.N) sold the PSP for $169 for five hours on Black Friday -- a time in which we believe the company was able to sell over 100,000 pieces of hardware," BMO Capital Markets analyst Edward Williams said in a client note.

The PSP is in its third year of production, and lately has been outshined by the popular DS.

Williams said that main beneficiaries of the price cut should be video-game retailer GameStop Corp. (GME.N), and to a lesser extent Take-Two Interactive Software Inc. (TTWO.O), which has a healthy lineup of games for the paperback book-sized device.

"In general, though, all publishers should benefit," Williams added.

Sony Computer Entertainment America is a division of global electronics maker Sony Corp. 6746.T(SNE.N)

A representative for Sony in Japan told Reuters there will not be an immediate price cut on the PSP in that market.