Price is the widely accepted factor to explain the current PS3/360 sales difference. As a consequence, most people believe Sony's only way to compete better is to drop the price next year.

Putting aside the matter of Sony's finances (to a certain extent), the big question is of course, price cut timing and its size.

As far as I've seen, the three valid options people assume can give Sony a significant boost are:

1- A $100 price cut in the first half of the fiscal year (most people say around March)

2- A $100 price cut before the holidays (October/November)

3- Two $50 price cuts, one early in the year and another one late in the year.

Now we have to look at competition's price cuts (Wii price cuts not considered). No matter which of these three scenarios happens, it's likely that Microsoft will either have no 2009 price cuts, or a small one before the holiday season (feel free to disagree). So here is my analysis of 2009 sales for each of Sony's three decisions and an assumed Xbox 360 price cut before the holidays:

1- Best case for Sony: continued momentum from March-October at the $300 price level, with this momentum carrying through the holidays even if Microsoft does a price cut before the holiday season. Optimistically, Sony could reduce the gap by 4 million, perhaps getting a chance of 2nd place in 2010.

Worst case for Sony: a near-repetition of this year's story, with PS3 edging out the 360 until the holiday season, and the 360 then winning the holiday season to end up nearly tied in yearly sales. Not a doom scenario for Sony, but certainly not a good one either.

2- From January to October, the 360 would probably gain an additional 1-3 million gap, but holiday sales are hard to tell with simultaneous head-to-head price cuts. In any case, with this scenario Sony's best case seems to be a near tie for 2009 sales (perhaps a 1 million gap in favor of the PS3 being very optimistic).

3- This is the most complicated scenario to analyse. Given the likely reduced impact of $50 price cuts, in the best case for Sony I don't see them gaining much ground on the 360 before the holidays. The pre-holiday price cut (simultaneous with Microsoft's) could make for a much better holiday than 2008, but I don't see the total 2009 gap being bigger than 3 million (comparegaid to scenario 1's best case of 4 million).

That's my analysis of the several scenarios for 2009 PS3/360 sales gap. Overall PS3's best case is a 4 million win, and the worst case around a 2 million loss.

In my opinion (which doesn't seem widespread), the most likely scenario out of these three is number 2. The best compromise between money spent on price cuts and benefit seems to be number 3 though (number one is too expensive). Unfortunately, that one is the hardest to analyze particularly in terms of holiday season sales.

Do you think these scenarios are realistic, or do you see some flaws in the analysis?

what about no pricecut?

That was fast! Well, in that case it's hard to see anything but the gap growing by 3-4.5 million in favor of the 360.

I hope Sony can muster up a $100 price drop as it should end all those PS3 is doomed threads.

I think they will go for option 3 with an emphasis on bundles like a Killzone 2 one.

skimming saves alot of time

Still quite an interesting read

 Only one cut by 50 dollars is a possibility too...

I agree with SMcc.  GodoW3, KZ2, and GT5 bundles seem very likely.

I just don't see Microsoft cutting prices below 199. How would they do that?

I can only imagine dropping the Arcade, then giving the 60 GB away for 199.

I don't think it'll be an early price cut in NA next year. Probably mid-late next year, which will be coupled with the EU drop or later than that.

I believe a JP drop will come very very soon though.

Option 1 is best if they actually want to beat the 360...option 2 if they want money

I think good analysis! I am very impressed with you NJ5...I think that sony will decide soon (they may already have) on whether or not it is worth trying to be 2nd place. What i mean is they may just say, this is where we are with the ps3, its selling very well (not in comparison with the ps2, but in general) and they will eventually make money on it. Kinda go gamecube on this system and focus on next generation. Maybe at most a 50 dollar cut.

If they decide to go balls to the wall, then i think they will do a 100 dollar cut around the time of KZ2.

By dropping the Arcade to $150 of course... 2009 holiday will be four years after 360's launch, when the Core launched for $300. A halving of the price after 4 years doesn't seem too dramatic, especially when so many are considering the possibility of the PS3 halving its price after 2-3 years.