The high price of the PlayStation 3 could drive a considerable amount potential consumers towards the cheaper alternative this Christmas – Microsoft's Xbox 360.
That's according to EDAAR analyst Jesse Divnich, who believes the PS3 is "too steep" in price for the mainstream market, and urged Sony to cut the price before the key retail period.
"We still urge Sony to consider a possible hardware price cut this holiday season," wrote Divnich.
"We should note that if Microsoft’s first-party titles perform significantly better in quality and popularity than Sony’s this holiday season, we could begin to see a considerable amount of potential PS3 owners, who may be waiting for a PS3 price cut, to choose the Xbox 360 over the PS3."
Not even great software will push sales, according to Divnich, who expects Epic's Gears of War sequel to be the biggest seller over Christmas in the US.
"The USD 399 price point is simply too steep to entice the casual and mainstream markets, regardless of how great Resistance 2 and LittleBigPlanet may be," he stated.
"Currently, we expect Gears of War 2 to be the single best selling SKU this holiday season."
Last month Microsoft slashed the price of the Xbox 360 in all regions, dropping the US Arcade unit to below USD 200.
Divnich estimates the console to have sold 320,000 units during the month, compared to the PlayStation 3's 215,000 units, although he suggested the price cut may have had a much bigger effect.
"If September hardware sales fall below our estimate (under 200,000 units), it could be an indication that the Xbox 360 price cut played a bigger role on hindering PS3 sales than what we originally expected."
"The surge in Xbox 360 sales likely came from the mainstream and casual markets who were enticed by a sub-USD 200 Xbox 360 SKU," he added.
Sony has maintained it will not be cutting the price of the PlayStation 3 before Christmas, with SCEE's David Reeves stating in August, "There is no price cut. We're not going to drop the price this year."