Sony had little choice but to cut PlayStation 3 price

Sony Corp. (SNE) hasn't had a consumer-electronics hit since the Walkman. It's in such dire straits these days, in fact, that its decision to slash the price of its PlayStation 3 game console is wholly unsurprising.

The company reported awful earnings for the first quarter, dragged down by its PS3 game system -- losing ground to its rivals, Nintendo's (NTDOY) Wii and Microsoft's (MSFT) Xbox. Approximately 1.1million PS3 and 1.3 million PSP units were sold, down from a year earlier. Sales in Sony's game division also declined, although the Japanese electronics giant had high hopes for its first-person shooter game, Killzone 2, to boost market share.