Analyst: PS3 price cut to spur industry

Games industry analysts expect Sony's PlayStation 3 price drop to boost flagging sales and restore confidence.

"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," EEDAR's Jesse Divnich told Gamespot

The analyst predicted the price cut would have positive effects for retailers, publishers and peripheral manufacturers "across the board".

"It is safe to assume that confidence across the entire industry just lifted," he said.

Wedbush Morgan's Michael Pachter agreed describing the newly-price PS3 as "pretty compelling value" and the cut itself as a "bold move" which could result in a hardware sales spike of up to 30 percent.

Both analysts were cagey on whether Microsoft will follow suit with an Xbox 360 price drop, although Divnich said the PS3's lower cost in comparison to the 250GB Xbox 360 could prove a major draw.