Sony PlayStation 3 Price Cut Indicates PlayStation 4 Development

Sony's recent price cut on its flagship PlayStation 3 games console has led analysts to speculate that the company may have plans to unveil its next-generation PlayStation 4 console in the very near future.

The Price Cut

The price cut was announced during Sony's GamesCom presentation. The cut will see the company cut the retail price of its 160GB model from €299 to €249 and the price of its 320GB model from €349 to €299. Similar cuts were also announced for its current PSP handheld.

The new price is set to come into effect immediately in all North American and European territories, following in Japan on Aug. 18, 2011.

"[T]he new price will make the platform more accessible than ever, and will appeal to a wider audience looking to buy the best entertainment system for their home," commented a Sony spokesperson on the price cut.

"Through these price reductions, the upcoming line-up of blockbuster software titles for the PS3 system and the industry's strongest offering of entertainment services, SCE will continue to expand the PS3 platform and deliver a world of computer entertainment that is only possible on PlayStation."

Sony PlayStation 4

Since the news broke, analysts have generally fallen into two camps.

The first have taken the move to cut the PS3's price as a reaction by Sony to the growing market dominance of its Microsoft-born Xbox 360 competitor. Others have taken the move as an indication that Sony may well be planning to unveil the next-generation PlayStation 4 console in the very near future.

The analysts cited Sony's ongoing tendency to cut the price of its consoles and handhelds just before unveiling a new version, or product as evidence for their theory.

Just before the company unveiled the PlayStation 2 in 2000 Sony slashed the price of its original PlayStation console. More recently, prior to unveiling its new "slim" version of the PS3, Sony cut the price of the original clunkier model.

The speculation is the latest in a long line of rumours regarding Sony's next PlayStation console.

In May, during a conference call to investors, Sony's executive vice president and chief financial officer Masaru Kato hinted that the PlayStation 4 was already in development.

The revelation came after Kato was asked to explain increased research and development costs. In answer to the question Kato reportedly commented, "the future platform -- when we'll be introducing what product I cannot discuss that -- but our development work is already under way, so the costs are incurred there."

More recently, a report from the Digitimes in July claimed unnamed sources had revealed the new console was set for release in 2012 alongside Nintendo's Wii U.

The Digitimes reported that unnamed sources had revealed to it that Sony had instructed the Taiwan-based Foxcon and Pegatron Technology manufacturers to begin assembly of as many as 20 million PS4s. Foxconn and Pegatron Technology are the two companies that assembled Sony's current PS3 console.

The ailing fortunes of its PS3 console have also been cited as a potential reason Sony may push to see its next-generation PS4 released sooner rather than later.

In its most recent quarterly financial statement, Sony reported a dramatic 25 per cent drop in the number of the number of PS3's shipped for Q2 2011 compared to the numbers it had shipped in the same period during 2010.

Sony has since blamed the downturn on the slew of disasters that have hit the company. Chief among these were the Japanese earthquake and the subsequent PlayStation Network hacking saga.

With this in mind, many analysts have speculated that Sony may well have decided that it's better to cut its losses and hedge its bets on the next generation of consoles.

Sony declined to comment when asked about the future of its existing PS3 console.