Sony will drop the price of the PS3 in the US again next year, according to industry analyst Micheal Pachter.

Pachter predicts a price cut early in 2008 to coincide with the release of Grand Theft Auto 4. The news comes on the same day Microsoft formally dropped the price of its Xbox 360 to $350 (£175).

"We do expect Sony to be in a position to cut the price of the PS3 in early 2008, when blockbuster games Grand Theft Auto IV and PS3 exclusive Metal Gear Solid 4 will launch," Pachter said in a note to video game investors.

The analyst believes current-gen prices may still be too high, however, despite all the trimmings offered in the PS3 and Xbox 360.

"We continue to expect higher average console prices to be an impediment to rapid sell-through of hardware," he said. "We expect cycle-to-cycle declines of 10 percent or more for hardware sales to persist through the end of summer 2007."

While the PS3 won't see a price drop according to Pachter in time for the holidays, he believes Sony will likely drop the price of the PS2 this year. Sony's second-generation machine is currently the third best-selling console on the market according to NPD.

See also:

PS3 review