Analyst: Watch for Falling Console Prices this Summer
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.
Comments
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Darth Do'Urden
March 08, 2011 at 12:04pm
Wow...you won't buy a PS3 because you don't want to lose your security clearance? Congratulations, that's the most paranoid thing I've heard in months. I guess my TS/SCI is more resilient than yours....
As for the reasoning stated in the article that the Move isn't selling due to being too highly priced as a bundle ($399)...that's rather disingenuous considering that the XBox 360 with Kinect bundle is also $399 at nearly every major retailer (Dell has it $10 cheaper). Kinect hasn't done as well in most reviews as the Move, yet it sells millions because there's already millions out there with a 360. Sales numbers do not a superior product make--more popular perhaps, but not superior. When the 360 can put out something even remotely close to Uncharted, then we can talk.
As for price cuts...I'd be surprised. Pachter is hardly a reliable source, and nevermind that consoles seem to be holding their own despite the bad economy. I think by adding value for the price is the right way to go here. Sony's done a decent job of this, but could certainly do much better. Nintendo is the king in this department of bang-for-buck with families, but every famiily in the world already has one, so they need to do something to add more value, lest a price drop become critically necessary.
I, for one, believe that adding value is better than price drops. These companies need to make money in order to keep pushing out product to us, the consumer. But they need to get more creative in bringing value to the core product instead of just dropping their pants on price and expecting that to move units.
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violian
March 08, 2011 at 11:55am
I bought an Xbox-360 slim "arcade" on BlackFriday-2010 at Target for $120. I don't think it can get cheaper than that new.
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Darth Do'Urden
March 08, 2011 at 12:06pm
But how much have you spent after the fact to compensate for the Arcade's shortcomings? If you only have like 2 games, then probably not much. But if you actually consider yourself a gamer....
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someuid
March 08, 2011 at 10:06am
You know, I won't be buying one. I've no interest in an XBox because, well, it is from Microsoft. They already get enough of my money via OS sales.
And as for a PS3, forget it. The risk of landing in Sony's crosshairs is to risky. I know the chances of it happening are slim because I'm not a modder or cheater or cracker/hacker. But there is a chance of it happening because legal departments decide to do a blanket lawsuit, or someone online managed to fool Sony into thinking it was me so they go un-baned or un-sued. The massive personal loss I would suffer (loss of job due to not being able to hold a security clearance) is just too great, especially for a console game machine. The risk does not match the reward.
I'll be keeping my cash, especially since I already own a Wii.
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