A price cut announcement for PS3 could come even sooner than some would expect. The analyst said, "Recent channel checks indicate increased speculation for a PS3 price cut announcement from Sony in the next couple of days."
Hickey added, "We think the company needs to reduce the current price by $100 to effectively restart unit velocity at retail. ... We believe the market is expecting a PS3 price cut in April or by June (E3) at the latest...
"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."
The standard 80GB PS3 retails for $399. A price cut for the PS3, Hickey said, could act as a catalyst for videogame-related stock in the publishing and retail sectors.
Hickey also passed on rumors of a radical change in the PS3 hardware strategy: "We are also hearing continued speculation that Sony is working on a non-Blu-ray PS3 console, which could enable them to make the aforementioned hardware price reduction."
Such a move would fragment the PS3 user base, software library and development community, as all disc-based PS3 games on the market today are on high-capacity Blu-ray. The Blu-ray component, however, has been cited as a primary reason that the PS3 debuted as the most expensive console on the market.
Sony is meeting with publishers and retailers this week in Arizona for the company's annual Destination PlayStation event, where the firm announced a slew of new software for the PSP in particular today, including LittleBigPlanet, Assassin's Creed and Rock Band for the handheld.