PS3 price cut this month say Japan analysts

A price cut is 'likely' for Sony's PlayStation 3 games console this month, say leading analysts in Tokyo.

“We think it likely PS3 prices will be cut during July, and we intend to revise our outlook [on Sony's performance] after assessing the extent of any cuts,” said Nomura Securities senior analyst Eiichi Katayama in a private investment briefing this morning. Nomura is Japan's largest investment banking firm.

The prediction appears to contradict comments from Sony president Ryoji Chubachi, who today told Reuters that Sony has no plans to cut the PS3 price at present. Reuters reporters had asked Chubachi if Sony would cut the PS3 price to boost demand and counter strong sales of Nintendo's Wii video games console.

Recent advertisements from retailer Circuit City have shown the PS3 with a price of $499, an effective price cut of $100. GameDaily's James Brightman yesterday reported that a source at 'one of the world's biggest retailers' had confirmed that the PS3 price will be cut on July 12. The report did not name the source.

A price cut for the PS3 has been predicted for several months, after sales proved significantly weaker than predicted. The high price of the powerful console has been blamed as a key factor deterring consumers. Competing consoles - Nintendo's Wii and Microsoft's Xbox 360 - are both significantly cheaper.

While noting that the likely PS3 price cut has yet to be factored into predictions, Nomura's overall outlook for Sony is positive. The investment firm's analysts expect Sony's operating profits to double in the first quarter of fiscal 2008. “We expect Sony to see operating profits expand as increased losses in TVs and games are offset by substantial higher financial service profits and strong sales of digital cameras supported by yen depreciation,” Katayama said.

Update July 9: As widely predicted, Sony has reduced the PS3's price by $100 in the US.