PS3 Needs A $200 Price Cut Says Analyst

Bank of America analysts are saying that Sony needs to cut the PS3 price by a third, to $399, in order to compete with the Xbox 360 and especially the Wii. Analyst Micheal Savner told GamesDaily:

“While Sony could cut the price by $150 - $200, we view that as less likely given that it is already losing approximately $200 per console at $599, based on our estimates … Offsetting a potential price cut are decreasing production costs, which should improve significantly this year. We estimate that the loss per console could decline to about $50, assuming Sony does not cut its wholesale prices. Bottom line, we don’t expect Sony to make up meaningful ground against the Wii this year.”

The PS3 is currently running last in the console wars, 4 million consoles behind the Wii, and 6 million consoles behind the Xbox 360. Even worse for Sony, the loss on each PS3 console is around $250, the retail price of a Wii.