PlayStation will run movies from Netflix

Sony (SNE) and Netflix (NFLX) announced late Sunday that the movie rental company will offer films over the internet that can play on the PlayStation 3. According to the deal, PS3 subscribers will have access to movies from the rental service by loading a new Blu-ray disc, available free from Netflix, into the game console.

The alliance should give both companies a much-needed bump in sales. The PS3 console outsold the Microsoft (MSFT) Xbox 360 and Nintendo Wii in the U.S. last month, but price cuts fueled many of those sales. Sony needs something to help sustain an advantage over its two powerful rivals.