According to a new report in Bloomberg, Sony's PlayStation 3 continues to gain steam as the console sold a record number of units in Europe during the holiday season last year. During the five-week period ended December 31, 2007 Sony Computer Entertainment chief Kaz Hirai said that 1.2 million PS3s were shipped across Europe, matching the holiday sales results here in the U.S.

PS3 sales have been on the rise since Sony cut prices and introduced the cheaper 40GB model. Back in October Sony cut prices by 17 percent in Europe, 17 percent in the U.S. and 10 percent in Japan in order to better compete with the much cheaper Wii and slightly cheaper Xbox 360.

Even though the PS3's performance has improved, analysts doubt Sony's ability to meet its 11 million units sold target by March (the end of the company's fiscal year). "It's an industry consensus that PS3 sales will fall short of the target," commented Mitsuhiro Osawa, an analyst at Mizuho Investors Securities Co. "Sony must think it's okay as long as the game business doesn't drag much on its overall earnings."

Bloomberg points out that Sony's game division posted seven straight quarters of losses. During the three months ended September 30, the game division generated 12 percent of overall revenue at the company.

Analysts at the Daiwa Institute of Research are predicting that Sony will sell eight million PS3s by March, falling short of their goal by about 27 percent. Daiwa also forecast that Nintendo will sell 19 million Wiis and Microsoft will ship 9.1 million Xbox 360s.

Although Sony Chief Financial Officer Nobuyuki Oneda admitted last year that the PS3 target might not be met, Hirai wasn't willing to make that concession yet. "We haven't made any conclusion whether we have to give it up,'' he said. "It