July 3^rd, 2006 (1:21pm) - Ubisoft president Yves Guillemot has warned that while his company is optimistic about the prospects for the next-gen consoles, Sony must be prepared to drop the price point of the PS3 in 2007 if it is to compete effectively with the Xbox 360.

Speaking to business news agency Bloomberg, Guillemot expressed the view that while the PS3 will see enormous demand from early adopters this year, the price point could be a major stumbling block in the following months.

Ubisoft has committed heavily to the next generation with updates to existing franchises, as well as new titles such as Assassin’s Creed and Wii exclusive Red Steel, and its recently revealed forecasts for the coming years are very positive for the next-gen systems. The French firm expects 40 million consoles to be sold in the US alone in 2008.

However, Guillemot - whose family controls a major stake in Ubisoft - clearly agrees with outgoing Microsoft chairman Bill Gates, who has claimed that 2007 will be the crucial year for the next-gen console battle.

PlayStation 3 is set to launch in mid-November priced at $499 for the lower-spec model, and at $599 for the higher-spec model, which includes a larger hard drive and a HDMI video port, among other additional features.

The pricing is significantly more expensive than Microsoft’s Xbox 360 - which, it has been claimed, will be less expensive than the PS3 even if it is bought alongside the external HD-DVD drive which will launch for the system later this year.