Nathan Layne in Tokyo | SONY'S game unit plans to cut jobs in the US and is eyeing restructuring in Japan as it struggles to keep up with rival Nintendo. Sony Computer Entertainment (SCE) spokeswoman Nanako Kato said it was not yet decided how many of its roughly 1500 employees in the United States would lose their job as part of the restructuring. News of the layoffs leaked out through gaming websites.

One, kotaku.com, reported on Wednesday that roughly 80 to 100 employees in the US headquarters were laid off. SCE is also looking at ways to make its Japan operations more efficient, though no concrete plans have been drawn up.

Sony Computer Entertainment, which makes video games and the PlayStation 3 (PS3) console, announced plans in April to cut up to 160 jobs, or 8 per cent of its workforce in Europe, and said it would look to streamline its US and Japan operations. We are taking another look at the company as a whole, Ms Kato said. Sony ruled the $US30 billion global game industry over the past decade with the original PlayStation and PlayStation 2, but demand for the PS3 has been slow so far due to its high price tag and the limited availability of attractive software titles.

Investors are widely expecting Sony to make a sizeable cut to the PS3's $US599 price tag to spur demand. For Sony to keep growing it really needs the game division to take off, HSBC analyst Carlos Dimas said. There will be no improvement without a price cut, he said.

Launched late last year, the PS3 sold just 45,321 units in May in Japan, compared with 251,794 units of the Wii. In April, the ratio was four to one in favour of the Wii, according to Japanese game magazine publisher Enterbrain. Nintendo, known for such game characters as and , also launched its latest console last year.

The Wii features a motion-sensitive controller that allows users to direct on-screen play by swinging it like a tennis racket or wielding it like a sword, opening a new avenue of game playing. In the United States, the Wii was the top-selling new console for the fourth month in a row in April, with Nintendo selling 360,000 units, while Sony sold 82,000 units of the PS3 and Microsoft sold 174,000 Xbox 360 machines. Sony's game division posted an operating loss of 232 billion ($2.

28 billion) in the year ended March 31 due to hefty start-up costs for the PS3, a spec-heavy console that has been losing out to Nintendo's simpler but wildly popular Wii. The game division's woes are well known to the market but have done little to dent Sony's share price, which hit a five-year high last month and is up 33 per cent so far in 2007, handily beating the benchmark Nikkei average's 5 per cent gain. Investors are still banking on Sony to regain its footing in the game market to recoup its investment and balance out a recovery that has largely been driven by cost cuts in its core electronics division and robust sales of flat screen TVs.