Analyst: '360 cut may force PS3 price drop'

Following Microsoft's announcement that it is to cut the price of the Xbox 360 series of consoles, analysts believe the move now puts Sony under pressure to do the same with the PlayStation 3.

Games analysts Strategy Analytics believe Microsoft's price cut could see the recent sales hike of PS3 consoles plummet as buyers opt for the much cheaper Xbox 360, forcing Sony to consider a PS3 price cut.

“Sony will be nervous that the PS3's recent sales surge may fizzle out now that the premium Xbox 360 undercuts the PS3 by £40, and the cheapest Xbox model is almost half the price of a PS3,” said Strategy Analytics principal analyst David Mercer.

“Sony will be scrutinising the daily sales reports, but will probably try to hold out until later in the year before making its next price move.

“Microsoft must continue to drive cost out of console manufacturing in order to sustain these improvements in financial performance.”

From Friday, the cheapest Xbox 360 model will be the Arcade bundle for £159.99, while Sony's PlayStation 3 console will remain at £299.99.