Sony's Playstation3 falls further behind rivals

The PS3, trailing Nintendo Co.'s Wii and Microsoft Corp.'s Xbox 360 consoles, was closing in on the No. 2 Xbox 360, with new games and quarterly sales growth at twice the speed of last year.

Sales fell 19 percent last month however, curbing any gains made during the year. In spite of a general economic slowdown, the rival Xbox 360 saw gains of 8 percent, while the industry leader Wii watched its sales double.

The news comes as a huge blow to the Japanese electronics firm. After two years of losses, the firm forecasted its gaming division turning a profit at the end of this fiscal year. Meanwhile, poor sales in other divisions have forced the company to lay off employees and shut down factories.

Ravaged by the global financial crisis, Sony saw the demand for its electronic products plummet in recent months and the job cuts underscore the challenges facing the electronics giant, which has fallen behind Apple Inc.'s iPod in portable music and is losing money on flat TVs.

Earlier this month Sony announced Tuesday that it would cut 8,000 jobs and shut down several of its manufacturing units which would help it reduce costs by over 100 billion yen ($1.1 billion) per year.

After selling at a loss since 2006, prices of the system have remained relatively high compare to the competition. At $399, the entry-level PS3 model costs at least $150 more than the Wii or the least expensive Xbox 360.

Microsoft cut Xbox 360 prices in early September and started bundling games with the most basic console for $199. Nintendo has maintained the Wii's initial $249 price, but sales are rising now that it has overcome an early supply shortage.

At the end of September, the Wii had a wide lead with nearly 35 million units sold since its launch in 2006 compared with about 22 million Xbox 360 consoles and 17 million PS3 machines. According to NPD.