Industrygamers

The Xbox 360, Wii and PS3 are all getting to the point where they could benefit from another price reduction, which would also give the games market a nice lift. But all three platform holders seem somewhat reluctant to make the move - so who will blink first?

When it comes to putting pricing pressure on the competition, Wedbush Securities analyst Michael Pachter believes Microsoft is in the best position. "After maintaining console prices at historically high points throughout 2010, all three console manufacturers appear to us to be poised for price cuts in 2011. U.S. PS3 sales were flat in 2010, while Wii sales were down more than 25% and Xbox 360 sales up over 40%; we think that Microsoft is in the driver’s seat on price cuts, and expect the company to lower price on its console at the first sign of a year-over-year sales decline," he said.

The Xbox business just had a monster holiday, completing its best year in history, and contributing to a considerable profit boost at the Entertainment and Devices Division. So right now, Microsoft probably doesn't feel compelled to do anything to spark sales. That said, when Microsoft does make a move, they should have some nice options.

"Since the 'whisper quiet' black Xbox 360 was launched in June 2010 and Kinect launched in November, we think that sales will be up year-over-year at least until June, and we don’t anticipate a price cut for the 360 until then. Microsoft has the ability to bundle Kinect with any of its 360 models at a compelling price point (we remain convinced that the manufacturing cost of Kinect is under $60), and we expect to see a Kinect console bundle priced attractively by June 2011 if not sooner. In our view, a $299 price point for a Kinect/250Gb 360 bundle would force Sony to bundle Move with a PS3 at the same price point, and we think that Wii sales will suffer mightily with such competitive pricing," Pachter added.

He continued, "It is not clear to us that Nintendo will cut the price of the Wii until it is ready to launch its next generation console, but we expect much activity on the console front at this year’s E3. Overall, a $50 across the board console price cut should contribute 5% to software sales growth in 2011, and would give us great confidence in a software sales rebound."

IndustryGamers would guess that we'll see at least one or more platforms see a price cut by the time E3 rolls around this year.

http://www.industrygamers.com/news/xbox-360-in-the-drivers-seat-to-start-console-price-cuts-this-year-says-pachter/

Seems like its been a long time since a price cut. I hope they do one this year. Maybe two but only if one is like a price cut on the 360, and than one that is a price cut on kinect.

Xbox is stupid if they pull the trigger first with the price cut.  They pretty much have the upper hand against the PS3 in North America, so just wait and see what Sony does. Regarding the Wii there is no point in playing catch up with them.  The Wii have won this gen, now just position your for profit and next gen.

all will cut price this year

this is how it will look

PS3 $199

360 $149

WII $149

KINECT $99

MOVE $69

Snakenobi, there is no way that Kinect will have a $50 price-cut this soon.  Not going to happen.

M$ is going to have a very easy time keeping above last years numbers until the 1-year mark of when they released the Slim.  360 sales were in the toilet last year until the Slim was released.  After that, 360 dominated.  With a price-cut, 360 may be able to stay even or slightly above last years numbers. 

PS3 desperately needs a price-cut in NA.  Hopefully all these exclusives spike PS3 sales, but it appears that America is pretty decided that they prefer 360 at this point. 

Fudge-Pacter still seems to think the Wii is going to release an HD console within a year so which is why he can't predict whether there will be a Wii price-cut this year.  That is sad.  If the Wii was down 25% and still beating the 360 when it was up 40% there is no need to release a Wii 2 yet.  I don't know why Pacter doesn't get this... years sales and stocks might go up, but it would be a huge risk for Nintendo and could spell disaster if they release too early. 

Hmm, Sony cut $100 late 2009, another $100 in 2011, that's $200 in the space of 24 months, hefty ... their PS division is barely breaking even at this point, and with PSP2 coming out (and psphone) we don't know if they're making a loss on those products. It could very well be a $100 cut for PS3, but Sonys financials would be hurting.

Wii, yeah that seems about right, they have no upper model to make good revenue on like the 360 and PS3, so slashing to $99/$129, although they could afford it, would leave them with little profit/revenue on HW, essentially throwing away money. A $50 cut would be effective for them. Like pacter said, they'll likely cut around the launch of the next Wii.

360, who knows, MS can afford a hefty cut, they're division is profiting very well right now, say they cut in September, it'll have been 3 years since they went $250 > $200. We could well see

Arcade - $129
Arcade Kinect bundle - $199
250G - $199
250G Kinect bundle - $250

Kinect could get $20 knocked off, not $50 though, selling far too well for that.

I just bought a 360 slim for 120 brand new on Craigslist. I make my own price cuts! :)

Remember people, if they are taking say a $70 margin on a console if they cut the price they'd only make a $20 margin and the increase in console sales will not offset the loss in margins on the hardware. Furthermore the cheaper the price the less each gamer who was unwilling to buy at a higher price is likely to be buying full priced $60 games and instead they may be more reliant on classic hits and used titles. When was the last time a console maker posted a much greater profit when they cut the price of their console? As for a $199 PS3? Sheesh do people really want Sony to never post a profit, even if they 'plan' for 10 years these are the years where they are supposed to be making a profit in order to fund the very expensive development of a next generation PS3.

When PS3 and Wii get cuts this xmas, X360 will. You can't still honestly believe MS are gonna go a 3rd year without a price cut, when Wii and PS3 will have had 2, do you?!

Its hillarious seeing hard core sony fans on here post things like...

"NGP can't sell for more than 300, sony will take a loss to make sure it competes with 3DS"

I understand that it will suck if you're Gilgamesh and you have "PSP2 will outsell 3DS" in your sig even before PSP2 is announced...but how hard to you want your favorite gaming company to not make a dime? lol