Analyst: Market Expecting PS3 Price Cut By E3

Though Sony has steadfastly refused on comment on potential price cuts to its PlayStation 3, analyst Mike Hickey of Janco Partners believes the company may have no choice but to discount the console -- possibly as early as April. This week, during its Destination PlayStation event, Sony is briefing its retail partners; citing "increased speculation" by Janco contacts, Hickey believes an announcement of a price adjustment could come within days. "If Sony does not cut the price of their console, we expect the continuation of languishing PS3 hardware sales and the potential for publishers to accelerate their reallocation of resources away from the PS3 console," Hickey warns. "We believe the market is expecting a PS3 price cut in April or by June at the latest." The analyst believes a $100 price cut -- which would bring the cheaper 80GB PlayStation 3 model down to $300 -- could "effectively restart unit velocity at retail." However, Sony is already said to lose money on a per-unit basis with the system, and if it cuts the system's price at retail it will likely attempt to shave excess fat off its its own production expenditures. To that end, Hickey claims to be "hearing continued speculation that Sony is working on a non-Blu-ray PS3 console." Such a scenario seems incredibly unlikely, as removing Blu-ray functionality would also break compatibility with the PS3's entire existing game library, all of which is published on Blu-ray Disc. Removing only the Blu-ray movie-playing software would not likely save any significant amount of money.