Analysts from DFC Intelligence have published their prediction that Sony could end up at the bottom of the pile, behind Microsoft and Nintendo, in the next-gen wars.

They claim the high price and lack of quality titles as the main reason the system won’t appeal to as broad an audience. From the report:

“It is our view that the PlayStation systems have been successful not because of hit software but mainly because of software diversity and third-party support… With the PlayStation 3 the company is going after the high-end power user. It is almost as if Coca-Cola not only decided to go with a new formula, but also decided to exit the low brow soft drink business to go into high-end wines.”

The report goes on to say that there will always be the early adopters who will buy the system at whatever price, But if Sony want to drive volume sales then 2007 needs to be the year of "drastic price cuts".

If Sony took a $200 loss on every system to become more price competitive and maintain market share that works out to $2 billion for every 10 million units. Will Sony investors swallow that type of loss?