With the Nintendo Wii well out of sight and Microsoft claiming the Xbox 360 has increased its unit lead over the PlayStation 3 to a whopping eight million, Sony’s best hope for hauling back the competition lies in reducing the console’s persistently high pricing.

If recent comments by Wedbush Morgan videogame analyst Michael Pachter are anything to go by, a potentially substantial PlayStation 3 price drop could be implemented by Sony Corp. this coming April.

According to Pachter, who’s known for mixed accuracy when it comes to his industry predictions, Sony will reduce the price of its 80GB powerhouse console from $399 USD to $299 USD in the weeks directly preceding this year’s E3 conference in California.

Pachter’s claim comes after American software titan Microsoft further distanced its Xbox 360 from the PlayStation 3 by dropping the price of its basic Xbox 360 to just $199 USD in September of 2008 – making it the best value console of the current generation and even undercutting the über popular Wii.

While a $299 USD price tag attached to the 80GB PlayStation 3 is likely to reinvigorate interest in the Blu-ray-equipped console, Pachter also believes that Microsoft will respond to Sony’s action by hacking even more dollars off its Xbox 360 Pro model (a.k.a. Premium).

If Pachter’s predictions carry any weight, then prospective Xbox 360 buyers can expect a further drop of $50 USD on the Pro model this coming May (bringing it to $249 USD) as Microsoft and Sony continue to trade blows while market leader Nintendo sits back and watches on in quiet amusement.

In terms of a possible price reduction to the hot-selling Wii, Pachter offers than unfailing consumer demand for the innovative motion-sensing console is likely to see its retail tag left unchanged – although he does offer Christmas 2009 as a tentative possibility.

Ugh ... Patcher ...

Honestly I don't think either Sony OR Microsoft will be dropping prices anytime soon.

Its odd how this article is primarily about a PS3 price drop but you made it seem in the headline that its only about the Xbox360.

Or Nintendo... They can still change bundles and introduce new colors before they have to do a price cut... There's also no sign that demand is letting up anytime soon.

I didn't even consider Nintendo, don't think they will be dropping the price for years. Yes years!

Microsoft's drop is contingent on Sony's drop, which is very unlikely given their financial ailment.

The fact that Microsoft is willing to drop the price or do something else to counter a potential PS3 price drop (as evidenced by MS's recent "prediction" that Sony would drop the price) should also serve as a deterrent to Sony... A price war is clearly not in their favor if they know MS is likely to retaliate.

^^
That's probably another reason (other than the desire of finally beginning to profit in USA too) why Sony wouldn't cut $100 even if it could, I'm persuaded Sony has one advantage compared to MS, being able to do more cuts, but it doesn't want to waste it in a retaliation price cut war that would damage both Sony and MS and benefit only Nintendo, that could sit watching and make its move in the end, after letting its competitors copiously bleed. $50 cut, if considered necessary and useful, is much more reasonable, almost natural as potential buyers are waiting for it and wouldn't provoke MS' wrath in an inappropriate moment.

Alby - How does Sony have the advantage to make more cuts?

Price wise, yes, because their product is $400 currently for the base model, but:

Microsoft, as a company makes money. Sony does not (supposedly as of this financial statement going out soon)

The Xbox 360 makes money on each console sold. The PS3 either does not, or is right at the threshold (therefore, Sony would lose more money on a drop than MS would)

Those 2 reasons show that Sony doesn't have an advantage on price cuts - They may see more gains from a $100 price cut than MS would with a $50 cut...However, it'd cost Sony far more dearly as they'd begin to lose $100 more per console, whereas MS may not even go into the red (per console sold).

^^
Obviously not immediately, but only across time, trying to delay each one as much as possible to be able to afford them and to avoid wasting them: provoking a price cut war would be a disaster, it would cost Sony an awful lot of money and would make it burn the theoretical advantage very fast with no benefit at all, it would damage MS, but Sony would receive in change even more damage, only Nintendo would gain from a Sony-MS war.