Analyst: Watch for Falling Console Prices this Summer

Paul Lilly

If you were to march into your local Best Buy to purchase a non-refurbished modern gaming console for the least amount of skrilla, you'd have to decide between a $299 PlayStation 3, $299 Xbox 360, and $199 Wii. That doesn't include gimped systems, like the $199 Xbox 360 with the hard drive stripped out, but the core models from each of the big three. What's interesting about this is that the price is the same now as it was 18 months ago, and at least one analyst thinks something has to give.

"We expect Microsoft to announce a price cut at this year's E3 Expo in June, and expect Sony and Nintendo to rapidly follow suit," Wedbush analyst Michael Pachter said in a research note .

"Demand for the Wii appears to be fading, and we think that a price cut is long overdue. However, this time around, Sony has a motion control scheme of its own with Move, which is off to a very tepid start. We think that Move's lack of traction inf the marketplace is due mostly to the higher price point for a system bundle ($399).

"On the other hand, Microsoft's motion control system, Kinect, has had a breathtaking start, with over eight million units sold in the first three months."

According to Pachter, "Microsoft is in the driver's seat on pricing," and once the Redmond outfit slashes the price for its Xbox 360 console, the other two console makers will follow suit.

Then again, you have to wonder what the motivation would be to cut costs. Consoles continue to sell, and rather than reduce prices, each vendor has adopted the tactic of adding additional peripherals and/or increasing storage space rather than roll back prices. The lone exception is Nintendo, and that's because the Wii is already the cheapest console of them all.

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