PS3 price cut imminent. £179.99.

Sony is planning another Gamescom barnstormer – with a PlayStation 3 price cut on the cards.

An announcement is expected at the August event in Cologne. Trade insiders told MCV the RRP will be 199.99, with retail prepared to go to 179.99.

But Microsoft might have to act in response if it wants 360 to be the No.1 console. That means a price drop or a value-oriented Kinect bundle are possibilities.

Sony reiterated that it ‘doesn’t comment on rumour or speculation’, while Microsoft says it ‘doesn’t talk about pricing plans in advance,’ when questioned about upcoming price activity.

However, a new hardware price battle would certainly be welcomed by UK retail.

For the first six months of 2011, MCV research (based on GfK Chart-Track data) shows the software market is down by over 50m year-on-year. Console price cuts could reignite the market.

Publishers expect a price drop, too. I would anticipate a further price cut on existing consoles prior to Christmas,” Codemasters boss Rod Cousens told MCV.

It’ll probably happen around September and Gamescom may be interesting. But there’s also time for a further cut next year, before Wii U is out.”

Analyst Nick Parker added: 199.99 makes sense as it keeps Sony’s options open for another drop, but they could be more aggressive.

Microsoft wants to be No.1 but I expect it is adopting a ‘wait and see’ approach with possible new value-added deals on Kinect.”

Wii is the latest console to see its price reduced, with many retailers stocking the machine for just 99. Some stores have admitted they may artificially drop the price again to 79.99 during Q4.

Nintendo has enjoyed the uplift of a recent price cut. UK MD David Yarnton told MCV: We’ve seen lots of reports that consumer confidence is low due to the price of food and fuel. So a price reduction for us came at a right time.”