I don't do prediction threads usually but there's always a first time.

The general consensus, I think, is that Sony will drop the PS3 price this year. It makes sense: Nintendo dropped the price of the Wii, Microsot could cut prices as well and it's been two years since the last PS3 price drop. From what I've read most people seem to expect a $249 price tag after the cut but I think Sony will go all out and cut the price to $199. Here's why:

1) It's been two years since the last cut. Sony's profit margins are always pretty slim (that's how they do business) and they make money on software and Blu-Ray anyways.

2) So far each year we have seen the PS3 price drop by $100. In 2007 they dropped it to $499, in 2008 it was $399 and in 2009 they cut the price to 299 bucks. There was no cut in 2010 though. A price cut is long overdue.

3) With the latest PS3 model released in Japan Sony seems to cut costs even further: Less LED's, smaller fan, HD output only through HDMI cable. Considering the costs per unit should've decreased anyway this could give Sony enough room to cut the price even further than $249.

4) Cutting the price to $199 now and to $149 late 2012 / early 2013 makes more sense than cutting prices to $249 / $149 as Sony will want people to focus on the PS4 at some point. A large price cut could detract from that. Cutting the price to $249 this year and $199 next year sounds like "too little, too late" for me as software sales will be down massively in 2013 for obvious reasons. It would also mean launching a new system while the old system is still priced at 200 bucks. For reference the Gamecube launched at $199.

5) Microsoft could cut the price of its console to $149 / $199 this year and they'd definitely still turn a profit on it. It's thoroughly possible that Sony could sell a $199 / $249 combo while still breaking even.

All in all I could see Sony drop the price to $199 this year. It's not a neccessity of course and we could just as well see the expected cut to $249 but I wouldn't rule it out.

What do you think?

Edit: I completely forgot to include the fiscal year forecast. Sony's projection is 15 million units for fiscal year 2012. That's even higher than FY 2011 shipments. Considering PS3 sales are down since the last price cut one could argue a drop to $199 is needed to meet the forecast.

they will definatly cut the price...but i dont know if it would be a 100$ cut...if yes Sony is going to destroy everything the next years and thats for sure...the PS3 would be finally affordable and that was the main reason people didnt get it...cause except that you got everything on the PS...Blu Ray,free online,the best 1st party support etc...oh man the future is looking so bright!^^

I always thought that Sony would Price Cut the PS3 to $250 this year but after reading your post...I agree with you.

$250 for the bigger model and $200 for the smaller model. At $200 I think PS3 would be #1 for 2011 no doubt...at $250 though I think Wii or 360 will take it.

I think Sony will cut to $200 this year ... a gut feeling of mine.

you make sound since my friend but it may be to early to cut PS3's price to $199.99.

if Sony waits till 2013 to drop PS3's price to $199.99 then in 2014 win PS4 comes out then Sony can do wht Nintnedo just did and drop price to $149.99 just befor the launch of PS4.

so a price cut to $249.99 is a better option then going straight for the kill since there makinf a profit right now and theres still time to make a PS3 slim 2 modle which would help in incressing slaes and lower price.

From a market share perspective, you would be absolutly correct. 

From a business perspective,  you should be wrong.

I could see it happening. Sony seems to care more about units sold than profits. They aggressively dropped the price of the PS2 when they were Dominating the market. They did it mainly to expand DVD into people's homes. I don't see why they won't get aggressive with the price cuts again. Espescially considering they are in last place and want to expand TWO forms of media: 3D and BLU Ray.

I personally hope both MS and Sony drastically cut their prices. That would help out many of the smaller games that will most likely get overshadowed this holiday: Dark Souls, Deus Ex, Twisted Metal, etc.

I think they will announce a price cut at Gamescom but it will be $250. Unless they shrink the Cell to 32nm (last was in 2009, 45nm) AND the RSX to 28nm (last in 2010, 40nm, 2011 not likely) then I don't think they can profit at $200. Good points though.

@UncleScrooge

I think the general consensus is that console loyalist typically lack sufficient detachment. Being that they routinely confuse what they want with what is logical. As with many things it isn't just what you ask, but where you go to ask. These forums are hardly a good barometer for such things. While some make compelling, and rational arguments the bulk of speculation will be poorly thought out, and reflect only naked desire.

In this case there isn't much in the way of a logical argument for Sony to reduce the price let alone to the extent you are predicting. Trading healthy profits for a prohibitively expensive price war isn't much of a trade. When what is being fought over is tantamount to scraps. Sony would gain nothing, and lose a great deal. This is what is really damning. The dynamic would not change. The competition would simply match of exceed. Since they can go further they will win by default.

You want a prediction. I predict early summer next year for all of the players. That is when the next generation is going to start pinching off the current price points, and all of the players will need to start hitting the bargain bins.

I still think that a $50 cut from ps3 will do more than a $50 cut from 360. I mean ps3 is beating 360 by 30,000 almost every week and a $50 cut wil boost ps3 sales to 50,000-80,000 above 360.

That's my prediction.