Sony could be planning to permanently cut the price of the PlayStation 3 console at the beginning of 2008. Analyst Michael Pachter said that with Metal Gear Solid 4 and Grand Theft Auto IV arriving at the same time, Sony is highly likely to slash the price of the console.

Sony has already introduced various price cuts of sorts. In the US it cut the price by $100 (£50) last month. But with the 80GB PS3 taking over the mantle and with the discounted 60GB model on its way out, the price cut will soon be a memory.

In the UK, Sony opted to bundle games and an extra controller with the £425 console instead of actually cutting the cost. Despite this, many retailers are selling the PS3 for below £400 just to get stock moving. Customers, it seems, would prefer a cheaper PS3 to a more generous bundle.

"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 speech to investors yesterday.

PS3 price cut coming soon?

Microsoft also joined the price-cut club on today. It made the announcement on Monday, and today lopped $50 (£25) from the cost of the Xbox 360 Premium console in the US.

No UK price drop has been announced yet for the Xbox 360 but it seems only a matter of time before we see some kind of price cut. The 120GB, HDMI-equipped Xbox 360 Elite is launching in the UK at the end of the month - 24 August to be precise.