With the rumors surrounding Xbox 1.5 getting louder each day, so are the rumors of a price drop. Well, if you live in Europe that is. MCV are reporting that PS2, Gamecube and Xbox are all set for a nice price drop, which is a good thing as most European gamers are paying way over the odd for their fix of gameplay.

Here's the word from MCV
Speculation about the PS2 dropping from its current £169 RRP in time for Q2 has been rife for some time. It enjoyed an ultra-successful Christmas season, but a lowering of price points to buoy sales during the quieter summer months has become traditional for the format holders. A reduction to £129 on PS2 is favourite, although some are suggesting that an aggressive £99 price is being discussed at Sony HQ.

Sony is forecasting the PS2 PAL installed base to reach 14 million by the end of next month and City analyst Goldman Sachs believes that a number of factors will drive PS2 hardware sales over the coming year – including a price drop. "PS2 currently retails at £169/e249-259, roughly e100 more than PSX did at the equivalent time in its sales cycle. We expect that economies of scale and production schedules will enable a further price cut this year," the company stated.

Such a move by Sony is likely to put pressure on Microsoft to reduce the RRP of Xbox – as the price cut on PS2 to £169 encouraged the US games firm to drop its console to £159 in September last year. However, commentators are also predicting that Microsoft is set to launch a smaller version of Xbox at E3 in May. Billed as Xbox 1.5, the new hardware is believed to be a stripped-down, portable version of the current console offering. Meanwhile, Nintendo’s current promotion offering a free game with the GameCube hardware has led many to speculate that once the offer ends on March 21st, a price drop on the console is due.