Pachter: Platform holders have made an 'error'
Believes the PS3 and Wii have maintained their current pricing for too long.
In a July 2009 video games sales preview, Wedbush Morgan analyst Michael Pachter has said that he remains troubled by the decline in sales of the three major consoles, and believes “the manufacturers have made a strategic error by maintaining pricing for too long”.
“The Wii remains at its November 2006 launch price of $249.99, and the core PS3 SKU has not seen a price cut since October 2007. We think that the negative software trend is less attributable to a weak software line-up, and can only conclude that until consumers are sufficiently interested in buying consoles, it will be difficult for publishers alone to drive sales higher each month,” stated Pachter.
Reiterating earlier comments, Pachter added: “Fortunately, we anticipate imminent price cuts to occur soon. Rumours of an imminent price cut by Sony and a console upgrade by Microsoft are rampant. One rumoured scenario includes clearing the 80Gb PS3 model to $249 from $399 and launching a new 120 Gb PS3 Slim for $299 and clearing the 60 Gb Xbox 360 Pro at $199 and re-pricing the 120 Gb Xbox 360 Elite at $249.”
He continued: “We have no information that a price cut or console upgrade is planned in the near term, although the Internet pictures of the PS3 Slim and of the new Xbox 360 packaging appear real to us. The actual pricing decision has not been leaked, and rumours of a $299 PS3 or of a $249 Xbox 360 are merely speculation, with the ultimate outcome potentially $50 higher for each.
“We do not think that either Nintendo’s or Sony’s console hardware forecast figures are achievable without a price cut, and we expect one by October for the PS3 with either a price cut or a different bundle for the Wii within the same time frame. We also think the Nintendo DS will be cut to $99 from $129 with the DSi cut to $149 or lower from $169. We anticipate the PSP will be cut to $129 from $169, and the PSP Go launch price of $249 to get reduced to $199 by some time in 2010.”
For the month of July, Pachter estimates US video game hardware sales as such:
Wii 305,000
PS3 135,000
Xbox 360 190,000
PS2 130,000
PSP 140,000
DS 590,000
The NDP Group is expected to announce official sales figures later this week.
User Comments
kamoflage@ CheekyLee
Nintendo are perfectly placed. They have the 'hot' console that is significantly cheaper to produce than their rivals, yet they are still able to charge a premium. The Wii is essentially a last gen machine that they are charging current gen prices for. MS and Sony must be scratching their heads and wondering what the hell went wrong. They both invested a fortune developing cutting edge (well 2 years ago they were) machines and have been outdone by a rebadged Gamecube with $30 motion sensors. The difference is that Nintendo predicted what people wanted and employed superior marketing. From a business point of view what Mario has done is pure genius.
Mr_Ninjutsu
This is becasue the sensor bar that is used to "detect or relay" the motion of the controller really isnt needed. You can use 2 candles as the infrared source. and would therefore be cheaper. But ofcourse Nintendo aren't exactly going to tell you to buy 2 candles...or they could package 2 candles instead of the sensor bar! xD
price cut towards £150 would be perfect.
YouTube Video
CheekyLee@ Woffls
Sony absolutely positively MUST cut the price.
Woffls@ Mr_Ninjutsu
PS3 is a different matter entirely, and I'm not sure what they should be doing with price at the moment. Yes it's a long term product, and they need to decrease the price accordingly, but the industry simply doesn't support this kind of model. If a product launches at a high price, it will sell slowly and publishers won't invest in it, so obviously consumer demand will stay low, and the price will stay high; publishers will continue to not want to invest in a platform with limited market share. Thus revealing the Catch 22 of intending to give your console an extended life cycle.
Karlius
kamoflage
I think it could be good news for consumers this holiday season with hardware costs becoming much more competitive. Unfortunately if you already own these consoles it looks like software prices may be on the rise. Substantially so if you want COD:MW2.
Mr_Ninjutsu