Three of the largest video game publishers reported quarterly earnings this week, their first since a round of partial game console price cuts in May, and for the most part they said the same thing: not enough, cut more.

That pressure on the three console makers -- Sony Corp. , Microsoft Corp. and Nintendo Co. Ltd. -- amounts to a challenge to accept deeper losses on game hardware in return for profits later as lucrative software sales rise.

That may be a risky strategy but the alternative looks even worse since the most recent data shows sales of the PlayStation 2, Xbox and GameCube down by more than a third compared with last year, a trend that if sustained could make Christmas bleak for hardware and software makers.

Retailers are starting to speculate that another cut may be in the offering. "We hear that one, or possibly two manufacturers, are thinking about the price cuts for the fourth quarter. We think the cuts would be good for penetration of the software -- new and used," John Antioco, Blockbuster Inc.'s chairman and chief executive officer told Reuters.

But the game industry's leader, publisher Electronic Arts Inc., said it was not clear yet if console makers were considering a fall price cut or if they would instead choose a strategy, as Nintendo has done, of maintaining the hardware price and bundling in games for free.

Financial analysts who follow the industry, for their part, think a cut by September to $149 for the Xbox and PS2 and $99 for Game Cube price was increasingly likely.

Those beliefs were reinforced after June sales data from market researchers NPDFunworld showed year-over-year declines in hardware sales of anywhere from 36 percent to 42 percent, due to the tough comparison to last June, when consumers were buying up consoles in a frenzy after the price cuts.