As part of his E3 summary, Wedbush Morgan Securities analyst Michael Pachter noted that he thinks Sony will make $499 the permanent price for PlayStation 3 once the 60GB model is completely sold out. In case you hadn't heard (and it seems the mainstream media hasn't caught on yet), the so-called PS3 "price cut" is really more of a limited $499 sale on the 60GB version as Sony tries to clear inventory to allow the 80GB SKU ($599) to take its place. Despite the 60GB phase out plan, Pachter expects the 80GB version to be slashed down to $499 in the near future.

"In our view, the Sony entry level price of $499 is here to stay," he stated. "We believe that there are presently 2 � 3 million 60Gb PS3s produced and not yet sold, and expect the entire supply to be diverted to the U.S. to honor the new lower price point. Once these units are sold through, we expect the company to lower the price of its 80Gb model to $499 on a standalone basis. We think it is important to note that the 80Gb model does not contain emulator hardware (the 60Gb model does), indicating that the production cost of the 80Gb model is likely in line or below the production cost of the 60Gb model."

He added, "Although we think that Sony's public relations gaffe was unfortunate, we do not believe that the company has ill intent, and we expect the $499 price point to be maintained until early next year, when the 80Gb model will likely be cut again to $399."

As for Microsoft, although Pachter himself was sure that a price cut was going to be announced for the 360 at E3, he still thinks one is coming sooner rather than later. "The company did not cut the price of its Xbox 360 despite our speculation that Microsoft would feel compelled to do so after Sony's price cut. It appears to us that the company is trying to deal effectively with its warranty issues, and was concerned that a price cut so soon after the warranty announcement might send an unintended signal that discounts were required to move hardware. We continue to believe that a price cut is appropriate, and expect cuts later in the year," he commented.

Regarding Nintendo, Pachter said he thinks "Nintendo's momentum will be difficult to overcome" and "Wii sales will remain high for the foreseeable future."

Interestingly, for Pachter, the "key takeaway" for this year's E3 was that the ESA "made a mistake in downsizing the show."

"In past years, publishers and console manufacturers used E3 to address the needs of their core constituents: media, retail, investors, and consumers. By choosing to eliminate any potential for a consumer element to the show, the ESA chased away much of the television media. By scheduling the show two months later than in the past, retailers stayed away. By scheduling the show during the calendar quarter financial quiet period (Microsoft, Sony, Activision and THQI did not meet with investors), only limited access was provided for buy and sell side analysts," he noted.

"We think that the traditional 60,000 person trade show may have been too large to manage effectively, but think that the new 3,000 person show was a terrible disappointment. The logistics were terrible (media events accommodated only 300 people, with throngs of media turned away), the Santa Monica locale was too spread out (travel times of more than 20 minutes between venues), and the media was not offered the spectacle it so craves. We believe that the lower costs for the show were more than offset by the loss of millions of dollars of free publicity, and are hopeful that the ESA moves the show to a more central location in the future, and restores the audience to a manageable, but spectacular size," he concluded.