We are witnessing how Sony PlayStation 3 is losing its battle to Nintendo's Wii and Microsoft's XBox 360.

A $50 price reduction has given a 63% sales boost to Microsoft. A $100 price reduction was required on PlayStation 3 for Sony to get the same effect. Sony's further actions may include introduction of a new 40 GB Playstation 3 at $399 and dropping the price of the 80 GB offer to $499. But will these measures be enough to stay competitive?

In the video gaming market price is not the only vector. Availability of high quality titles is the most critical factor. This has more dramatic effect on success than having the best hardware. Nobody is impressed by superior hardware if adequate games are not available for a system. And this is where Sony is losing the game.

No doubt, Blu-ray disk is a great thing but the very advantage of the media format has turned out a to be a big disadvantage. Simply, gamers have to wait longer for killer games. And this sometimes can translate into waiting from several months to an year. While Playstation 3 gamers are waiting for developers to release high quality titles, gamers on XBox 360 are already enjoying killer games.

Gamers will have to wait for at least 6 months before playing such highly acclaimed games like like God of War, Gran Turismo 5, Final Fantasy XIII and Metal Gear Solid 4. This means that the only means for Sony to stay competitive is to cut prices. But again, for hardcore gamers a $100 difference is not a big deal. What they want is to be able to play the games they want the most. So the question is, if Sony can hold out that long.