Sony (NYSE:SNE) has decided to cut the price of its portable Playstation. In the US, the retail cost will drop from $199 to $169, The move still makes it more expensive the Nintendo portable.

Price cuts are never a good sign at a consumer electronics firm, although it is generally assumed that as unit sales go up, the component prices drop, so margins may not be badly hurt.

Sony’s move does open the floor to the question of whether its will have to cut prices on its new PS3, which so far has lagged the Microsoft (NASD:MSFT) 360 and Nintendo Wii in sales. The PS3 is the most expensive of these game consoles.

Price cut for the PS3? Now, that would hurt.

Douglas A. McIntyre