Sony’s reluctance to reduce the price on its PS3 console is allowing Microsoft the chance to dominate the market and steal some would-be PS3 buyers, according to an industry analyst.

Xbox price cuts in recent weeks has already seen sales soar, however the analyst has said that it could also lead to a drop in PS3 sales.

Electronic Entertainment Design and Research analyst Jesse Divnich said: "We still urge Sony to consider a possible hardware price cut this holiday season. If September hardware sales fall below our estimate of 200,000 units, it could be an indication that the Xbox 360 price cut played a bigger role on hindering PS3 sales than what we originally expected.

"If Microsoft's first-party titles perform significantly better in quality and popularity than Sony’s this holiday season, we could begin to see a considerable amount of potential PS3 owners, who may be waiting for a PS3 price cut, to choose the Xbox 360 over the PS3."

He added: "The $399 price point is simply too steep to entice the casual and mainstream markets, regardless of how great Resistance 2 and LittleBigPlanet may be."

However Patrick Seybold, SCEA's director of corporate communications, is standing by Sony's current strategy and believes that its line-up on the run up to Christmas will be enough to snare buyers.

"As previously discussed we aren't making any price moves this holiday season," he said. "In my opinion, we have the best line up of any PlayStation generation going into this holiday and consumers will be very receptive to it.

"With PS3 titles for this including Resistance 2, LittleBigPlanet, SOCOM, MotorStorm: Pacific Rift to name but a few of our multiple exclusives, combined with PlayStation Home and increasing multimedia features for the hardware, we expect to have continued momentum going into and beyond this holiday season."

We'll see, Sony.