Sony Cuts Price in Latest Round of E-Reader Wars
Amazon.com (AMZN) recently slashed the price of its Kindle DX from $489 to $379. It also cut the price of its basic Kindle to $189 after Barnes & Noble (BKS) dropped its Nook e-reader to $199.
The e-reader wars, which have been on since last year, have reached the point of aggressive price-cutting. It is not unlike what happened to video-game consoles last fall when Microsoft (MSFT) cut the price of its Xbox 360, followed by drops in the prices of Sony's PS3 and Nintendo's Wii console.
At what point, however, do these companies start to lose money on their e-readers and video-game consoles? And when that happens, can they make up for it in sales of video games and e-books?
Or perhaps the companies don't make any money on the devices or their content, and the price wars are all about jockeying for market share in the hopes that one of the competitors will drop out, unit prices can be stabilized and content prices increased to allow the survivors to make profits. It will be a long road with big losses if that's the plan.