PS3 price cut "ridiculous" says economist

Sony's decision to reduce the price of the PlayStation 3 in Japan before the console has even launched has been branded "ridiculous" by a Japanese financial expert.

The outburst comes following Sony's announcement at the Tokyo Game Show that it is due to cut the Japanese price of the 20GB version of the console from 62,790 yen (421 euro) to 49,980 yen (335 euro).

"It's ridiculous to decide to cut the price before they start selling the PlayStation 3," said Yoku Ihara, head of equity research at Retela Crea Securities, speaking to Bloomberg.

"They may cut the price again if sales don't go well," he added.

Sony will take a bigger hit on a launch it is already losing money on, as highlighted by Naoki Fujiwara of Shinkin Asset Management, who stated the price reduction, "is negative in the short term because the company may not be able to sell enough consoles to cover an instant loss caused by the price cut."