Sony's (SNE) PlayStation 3 is still getting its butt kicked by Nintendo's (NTDOY) cheaper Wii and Microsoft's (MSFT) older Xbox 360: In April, Sony sold an estimated 127,000 PS3s in the U.S., according to research firm NPD Group. That's 30% below Microsoft's Xbox sales -- and Nintendo's Wii is still outselling the PS3 almost 3-to-1.

Based on comments from Sony's earnings call yesterday, now it seems the company is preparing price cuts to make the PS3 more affordable -- and give the platform a chance. (For more context, Sony sold 35% more price-reduced PS2's last month than PS3's , according to NPD.)

Daniel Ernst - Hudson Square Research

...on the Game division, after flat sales in the PlayStation 3 for the year you just reported you're forecasting a 30% increase, which is positive, but does that assume a price reduction in the plan for both the units and the profitability of the group?

Nobuyuki Oneda - Sony CFO

...In the case of the pricing strategy for the PS3, please allow me not to make any comments at this moment. This is a very serious issue, so if I announce, you know, the price strategy, that's where I'll fix the inventory level. I'm sorry.

http://www.businessinsider.com/sony-ps3-price-cut-around-the-corner-2009-5

Tell me what you guys think, you think this will happen at E3 or later in the year? Can Sony afford it? Will it be worth it?

DISCUSSSSSS

They can't afford it for certain. But they could easily price a slim at $299 I think. (

NO PRICECUT COMING.  SONY STILL LOSING $40 per PS3 SOLD.

Why? See this...

From Joystiq Click to go:

Sony CFO Nobuyuki Oneda noted recently that the PS3's cost is still 10 percent higher than the system's price, reports Andriasang.com. With the console's price differences in each region, if Oneda is talking about Japan, that would be approximately ¥4,000 ($42). In North America the same $40 loss would also hold true.

As bad as losing money on each console manufactured sounds, it used to be worse. Just a year ago the estimate was that Sony was losing over $100 per system. Losing a couple Jacksons (four Hideyo's in Japan) per console isn't great, but it appears that Sony's costs and sales on the console are slowly finding equilibrium. Unless, of course, there's another $100 price drop in the PS3's near future.

@ Derek, I read that article on N4G.com too, and they did not say that there is no price cut coming.

Strictly speaking they can afford it (i.e. they won't quickly go bankrupt because of cutting the price). It is however surprising that they're going to cut prices when they told investors they're focusing on profitability.

Sony has stated in their financial report they're not going to be profitable in the games division this fiscal year:

http://i43.tinypic.com/m913lh.jpg

So IMO, this forecast and upcoming price cut is a bit underhanded considering Sony's promises to investors. Especially when they're going to mix up SCE's financial results with Vaio and Walkman which might be quite profitable.

 I don't see where they said it in my article either.  I said it at the top of my post, and then explained why.  Given Sony's 1.5B loss, they cannot and will not cut the price.  The shareholders could (possibly) oust the board if they did something like that, since cutting the price would ensure another year of great losses. 

Now, if they were able to  come out with a cheaper model at a reduced price, that could be an option.. but the existing PS3 will not have a pricecut anytime soon.

@Derek and NJ5, keep in mind that PS3's smaller chips are rolling in by summer, and the last time that happend they dropped the price of the PS3 by $100. Also they might release a very cheap to manufacture slim PS3 which might be priced at $299.99

@rafichamp: No matter how cheap the upcoming PS3 models are, that doesn't change the fact that they aren't expecting to be profitable this year (fiscal year).

I think its ok if they don't do a price cut. They are still selling consoles. Whats most important is that they are churning out incredible games. 5 months into this year and they already have 2 AAA titles (Killzone 2, Infamous). As they release all the others in the pipeline (Heavy Rain, WKC, Uncharted II, God of War III, Mag, GT5, FFVXIII, Ratchet, Yakuza 3 and so many more) the PS platform is ALWAYS going to have buyers. Sure they might be third and they might have less market share then MS or Nintendo but as long as they live to fight another day they can always come back next gen. And with all the awesome IPs that they are creating, they will be very well positioned for the future. All they need to do is play it calm.

After seeing the forecast of 2.2B in losses for this fisical year plus the 13M sales, I have no doubt Sony will give the PS3 a price cut. If the ugly PS3 slim does not show up at E3 for $299 I will be amazed. From their financials, it looks like the whole corperation has decided to take losses now to stay competitive, and hope for things to turn around thanks to a better economic climate, and services across their devices.