Pachter: Sony set to win the holidays

Industry analyst Michael Pachter has warned Microsoft can expect to be outstripped this holiday season if it doesn't match Sony's PlayStation 3 price cut.

"If Microsoft does nothing, I think PS3 will outsell Xbox 360," the Wedbush Morgan analyst told IndustryGamers, but added that he doubts it will actually happen.

"My friends at Microsoft are extremely proud, and they absolutely refuse to tolerate the possibility that the PS3 will outsell the Xbox 360. I think they have the ads printed for the Xbox 360 price cut, and will drop them on us the instant they see PS3 sales greater than 360 sales."

Pachter commented that he expects Microsoft to continue selling Kinect and Xbox 360 bundles at a lower price until it decides whether to match the base console with the PS3's price tag.

At gamescom, Sony put into immediate effect a price cut on the PlayStation 3, reducing it to $249/£199/€249.