Possible PS3 Price Cuts Coming

Wedbush Morgan analyst Michael Pachter believes Sony will cut prices on the 80GB PS3 base model from $399 down to $299 by April. He also believes that, wishing to maintain momentum, Microsoft will follow suit, knocking $50 off of its 60GB 360 Pro model around the time of the 2009 Electronic Entertainment Expo, which runs from June 2-4.

"Once the PS3 is at a more affordable price point (we expect a cut to $299 in April), we think that sales of that device will once again begin to grow. We expect another cut in price for the Xbox 360, with the feature-laden Pro model likely to come down in price to $249 at or before this year's E3 show in June. We expect Nintendo to maintain Wii pricing at $249 until the company sees signs that demand is slowing, which means a price cut may not happen until late in the year, if at all," Pachter said.

According to GameSpot Pachter's statements were part of his NPD preview report released on Monday. Pachter and EEDAR's Jesse Divinch weighed in on the forecast of NPD Group's December game sales which is expected this Thursday. Both analyst predict strong console sales with more than 3.25 million Wiis sold domestically during the month, followed by 1.35 million Xbox 360s and 750,000 PlayStation 3s.

It was recently reported that Sony has reduced the production cost of its second-generation PlayStation 3 revision by 35 percent. According to a teardown report by analyst firm iSuppli it now costs Sony about $448.73 in parts and labor to manufacture each new PS3.

With the drop in production costs it is likely that we'll see some price cuts down the road. How soon and how much is unclear, however it would seem unlikely that we'd see such a drastic cut. Sony obviously still feels selling PS3's at a loss and recouping the revenues through games sales is the way to go, but I don't know that they are going to slash a $100 right off the top.

Sony has been working the promotions angle previously offering up to $150 off a PS3 with their new Sony card, a promotion that has been in affect since last November. They have since lowered the deal and it is now down to $100 off.