Recession is a terrible thing. with the UK economy being hit harder than most it is unfortunate that Sony's announcement of the PS3 slim and a price reduction has been used by Sony to reposition the price in the UK more inline with the current euro exchange rate.

But why would Sony do this when the UK is one of the few regions where the 360 outsells the PS3?

It's quite simple really the UK market isn't that important to Sony, although they are outsold by the 360 the numbers aren't significant. Their main concern is the US and rightly so.

If you look at the NPD data the PS3is outsold by the 360 month on month. In the US the Slim and price reduction are serious moves from Sony to take a larger chunk of the market and quite frankly it is something that should be successful.

At $300 vs. an elite at $300 the temptation to go for the fuller feature set of the PS3 would surely be a major draw for most gamers. And this is assuming that the price cut of the elite takes place.

Now let us look at the UK even before a price cut on the 360 elite

£230 vs. the new price of the PS3 £250

Now personally I don't see the price cut in the UK being substantial if it happens at all but $100 = £60 and 100euro = £85

If Microsoft do the sensible thing and lower the price of the elite 50euros and £30 to get under the £200 barrier you've still got to think that people will be looking at the PS3 as too expensive simply because there is a psychological effect of seeing a£199 figure.

Let us look at the price of the PS3 around the world

Japan = £192

US = £180

Euro zone = £258

However let us look at more natural exchange rates where the euro exchange is around 0.70 and the Yen 0.005 ( a little high actually ) the US exchange rate is sitting at a pretty normal level right now with only a minor difference between the more natural rates which would be around0.58

Japan = £150 (who wouldn't buy one at that price?)

Euro zone = £209

US = £173

Now if you want to get really boring you can talk about sales tax and VAT rates which are between 6-10% depending on what state you live in and 15% in the UK. The euro prices will include tax but I'm not sure if the Yen prices do but their sales tax is 5% so very low.

Ultimately I don't believe that Sony will readjust their prices exclusively for the UK once the recession is over. We've lived with a £300 PS3 vs. a £200 PS3 in the states when times were good it's unlikely that Sony would bother to adjust the prices unless there is a seismic shift towards the 360 in the UK.

The dream of a sub £200 PS3 seems to still be a far way off.