The long-anticipated price cut on Sony’s PlayStation 3 video game console might have come just in the nick of time, as industry sales continue to wilt in the heat of summer. Both game hardware and software sales have been flagging, but console price cuts typically spur game sales.

Sony took the PS3’s price to $299 from $399, and the company sounded bullish on its prospects for the holiday selling season.

“With this price move, we’re extremely confident,” said Jack Tretton, CEO of Sony Computer Entertainment America, in a interview. “I don’t think there’s anything more that we could realistically ask for in terms of putting us in a position to be successful this holiday, I really feel like everything’s lined up for us.”

Sony’s PS3 has languished in third place in U.S. home console sales, trailing Nintendo’s Wii and Microsoft’s Xbox 360, both of which carry lower price tags. While many analysts say the PS3 is the most  technologically advanced and powerful of the three systems, the $400 price tag in the depths of a recession was a tough sell. U.S. video game equipment and software sales fell 29 percent in July. Activision’s CEO even threatened to stop making games for the PS3, due to high costs and poor sales.

But Tretton said the home console cycle lasts for 10 years, making for a long race. “We’ve kind of kept out guard up and kept our powder dry and now we’re coming out with both fists swinging. We feel like we’ve weathered some significant competitive blows and now we’re great position to land a knock-out punch.”

“I think our competitors have had success in the case of Wii with the innovation and social aspect of the game play, but that seems to be wearing a little bit thin right now, and Microsoft seemingly pulled out all the stops last year, stripping down their machine and hitting that $199 price point on their base device.”

“If you follow this industry and follow where retail sales are generated it’s much like the football season, everything before holiday is pre-season and the numbers really don’t count. But when your get into the fall that’s when the majority of the sales are done, and we really wanted to time this announcement to take advantage of the fall selling season.”