Analysts say PS3 price cut could spike sales 30-50%

While analysts had been calling for a price cut to the as-yet-unreleased PlayStation Vita in recent weeks, Sony instead dropped the cost of its PlayStation 3 today, trimming the console's price by $50 to $250. Initial reaction to the cut appears to be positive, as Wedbush analyst Michael Pachter and Electronic Entertainment Design and Research analyst Jesse Divnich told GameSpot today they expect sales spikes in double-digit percentages thanks to the lower price.

Pachter said Sony made a "bold move" by cutting its price before Microsoft did the same for the Xbox 360 and called the PS3 "a pretty compelling value" at $250. He further predicted that Sony will see a 20 to 30 percent jump in hardware sales as a result. An Xbox 360 price cut could change that, Pachter noted, saying he expects Microsoft to first cut the price of the system's Kinect bundles and wait to see how that pans out before trimming the core hardware cost to consumers. (Currently, the most basic Xbox 360 sold new is the $200 4GB system.)

Divnich was even rosier in his assessment, predicting short-term sales of the PS3 to be up 30 to 50 percent.

"It is no secret that the PS3 has been struggling for some time against the Microsoft Xbox 360 in North America (but slightly outperforming in Europe) and this price reduction will undeniably increase hardware and software sales of the PS3 in all regions, both in the short and long-term," Divnich said. "We can only imagine that third-party publishers and retailers are excited by Sony's announcement as it lowers the barrier of entry to consumers before the crucial holiday season."

As for a retaliatory Microsoft price drop, Divnich said the Xbox maker will likely wait to see how Sony's move pans out before settling on its own pricing strategy.

"One thing is for certain, this holiday season just got a lot more interesting and the impact of the price drop will positively impact HD gaming sales this holiday season," Divnich said. "We expect the effect of the PS3 price drop to positively impact third-party publishers, retailers, and accessory manufacturers across the board. It is safe to assume that confidence across the entire industry just lifted."

Divnich now believes the biggest draw for the PS3 is as a cheaper alternative to the Xbox 360's 250GB version. Calling the quality of each system's software catalog nearly equal, Divnich said the question becomes centered around consumers' willingness to pay more for Xbox Live or the PS3's Blu-ray player.