Having just been introduced in the UK, the PS3 is currently sitting at around £399, compare to the Wii (£180) and the 360 (£200, £270 Premium).  It certainly is much more expensive.

There is no doubt that this price will harm the overall sales of the unit and I think everyone and their dogs know that they are making a loss with the system at the moment, but with reducing costs for Blu-Ray players and mass production of chips, we really need to see a price reduction soon.

Harking back to the days of when the PS2 was released, it was introduced at £299 which I recall was regarded as pricey at the time.  It wasn't long before the unit was reduced.  Within 10 months a whole £100 had been knocked off the RRP and it sat a bit prettier at £199 alongside the more expensive Xbox which was introduced in 2002 at £299.  We seem to be seeing the reverse of what happened then with the 360 and PS3.

So we need to see the same happening with the PS3 as what happened with the PS2.  We need to see the price fall by at least £100 this year, ideally in time for Christmas with a further reduction at some point next year bringing it more in line with the competition with a UK price of around £200 being achieved in no more than 18 months time.

What I think needs to happen:

Current price: £399

November 2007: £299

Sept-November 2008: £199 

 I think that the first price reduction, which I would say will be £75, will probably be in September, to co-incide with all the PS3 games that are coming out then.

It definitely needs to happen.

Sony needs to have a good Christmas this year and I reckon that they need to cut the UK price by up to £100 to compete. The RRP in the UK is £425 although play.com is offering them for £399, I still feel that any price over £300 is still too much money seeing as the 360 premium currently sells for £280 and could very well go down when the Elite package is released.

Maybe Sony should release the 20gb models to get the RRP down to a realistic level.

People will snap up the Wii and even the 360 in their droves unless they see a serious reduction in costs of the PS3.

You can actually buy a Wii and 360 together for less than the PS3. 

425pounds is just ridiculous. Its getting even worse with the news that the 20Gig model is effectively discontinued.

I don't think there will be a price cut this year. The PS2 had volume, and was selling out. The PS3 is more complex and expensive machine, and has had a LOT more investment (CELL, BluRay) in it - that is not counted as part of the production cost.

The problem is this: at the moment, the more units Sony sells - the more they lose. This can be offset by games/BluRay sales. If they drop the price by 100pounds - they sell a lot more units - and lose a lot more per unit. All round bad news.

They will milk it as much as they can - maybe throw in a free game (or two), promote HOME, and anything else they can - to sell as many units at the current price. If that doesn't work, a small price drop (50 pounds?) maybe before Xmas.

More likely to see a price drop early/mid next year, once they are closer to break even point. 

The thing is...at the moment, the PS3 is the cheapest blu-ray player on the market....once costs for production on the player start to come down....surely Sony will be making less of a loss per PS3 than before.

On top of this, they need to reduce the cost, it is just too expensive and realistically it need to come down to £299 at the most for Xmas this year to have a good chance to recoup some of the lost ground with the 360 and Wii. 

    In all honesty, I think a Ps3 price drop could possibly occur this year what with the dropping of the Emotion Engine, Reduced Blu-Ray costs, of course, thats only seculation based on the possiblity of stand-alone Blu-Ray players dropping to 300USD by the end of the year, and the switch to a 65nm Cell.( well, IBM started production near the end of March according to PS3 Fanboy I believe, so it might take awhile to fully switch over or whatever).

    Its definitely needed, but they very well could be waiting to make a profit or the Xbox 360 to drop in price, what ever comes first...of course if we have many more sales figures like February this year their priorities might change. 

I think Sony's too arrogant to drop the price this year.  I see possible 'bundles' or other deals which may help sales.  (Sony may include Blu-ray movies and/or games into the package.)

Don't forget that Sony is losing... what, about $100-$150US per unit at the moment? All these cost savings help to shrink this gap (esp. if they take the 20Gig model off the market).

I think Sony would rather be selling HALF the PS3's - and making a small profit - than double the number, at a $100 loss each. But I could be wrong. All depends on how worried they are about the 360.

...

The price of BluRay (standalone) players is a separate issue. I don't think the price is high because it costs a lot to make them - instead Sony is trying to MAXIMISE the profit they can squeeze out of the high-end HD movie market (they actually stated this in a statement a while back, and said that they don't want the price of players to drop too quickly - as it cuts into profits).

This is why they hate HD-DVD - they can force Sony to drop prices quickly, by dropping the price of HD-DVD players/discs. A price war can only be good for consumers ;)

As long as PS3 w/w sales are competitive with 360, there will be no PS3 price cut.  Remember, PS3 is still ahead of where the 360 was at this point in its lifetime.  As I will discuss later it doesn't appear Microsoft has any major price cut in line either.  The only hope you have for a PS3 price cut is for the introduction of the 20 gb PS3 across Europe for around £350. 

I know there is debate about whether Microsoft just increased the price of the 360 with the "elite" model, but unless they increase overall shipments, the average price of the 360 has indeed just gone up.  Does anybody really believe that the elite unit will only be purchased by people who otherwise wouldn't of bought a 360?  To the hardcore gamer, the difference in price between the "good" 360 and the "good" PS3 has gone down.  I was very bullish that Microsoft would introduce a significant price cut this year and thus Sony and Nintendo, however I find it hard to believe that Microsoft will sell the Elite at 479 (probably around £325) only to cut the price a month or two later.  It would also be weird for MS to cut the premium and core price but not the elite.  Remember the 20 gb hdd sells for $100 and the 120 gb hdd sells for $179.  The price differential between premium and elite SKU cannot be much more (more because of HDMI port and cable) than $79.  Similarly, the price difference between elite and core cannot be much more than $179.  Then there is the possibility of the outright elimination of one of the SKU's.  Very confusing, but to make things simpler, the first move on pricing will have to be made by Microsoft.

So what you're saying is this is a game of Chicken between Microsoft and Sony.

You know I can't see what Sony was thinking trying to go out here raising the price of the system in the midst of most people living in struggling economic situations, raising the prices of the games when what helped them build this Playstation legend was the low cost of CD's on the PS1 & affordable prices of games on the PS2. Thinking they could make moves like these launching last, launching last against formidable competition for once.

As they say in pro wrestling were they a "mark for the business"? Did they truly honestly believe their own hype? I hope not.

Playing money games against Microsoft simply isn't wise. Microsoft will spend them right out of the business breaking the bank of Sony's game division which they certainly don't need to lose.

If Europe & PALS dry up for Sony, It Is OVER.
Count on it.

John Lucas