Signal Hill analyst Todd Greenwald has said that "Xbox 360 needs a real price cut" in his latest note to investors.
Microsoft dropped the price of the 20GB console in the US by USD 50 last week prior to E3, but Greenwald believes the company needs to do more in the face of competition from the PlayStation 3 and Nintendo's Wii.
"We remain very sceptical of Microsoft's pricing strategy and competitive positioning versus the PlayStation 3.
"At USD 349, with a 60GB hard drive, we just don't think it is a compelling product compared with the PS3 at USD 399 with an 80GB hard drive (along with more processing horsepower, Blu-ray, Wifi, HDMI, and going forward, more exclusive content)," he offered.
"We'd also note that the Xbox 360 has just been surpassed by the Wii in the US, despite Microsoft's one year head start over Nintendo.
View: Games Industry