"PS3 price cut this summer" says analyst

Wedbush Morgan analyst Michael Pachter believes Sony could offer a PlayStation 3 price cut as early as this summer due to decreasing manufacturing costs.

"It is possible that Sony's cost of production for the PS3 has declined to the point that the company may consider a hardware price cut some time this summer, and we may see a price cut for the PS2 before the holidays," said Pachter.

The analyst believes the price cuts will significantly boost sales, adding, "Either of these could serve as a catalyst for sales growth later in the year."

Pachter also states that movie tie-ins will be leading software sales in the coming months allowing publishers to cash-in on the PS2's user base.

He said, "Over the next four months, we expect the PS2 versions of Spider-Man 3, Shrek the Third, Ratatouille, Transformers and Harry Potter and the Order of the Phoenix to sell more units than on any other platforms."