Between these two months the PS3 received its $50 price drop and retailers began offering some versions of the Nintendo Wii for approximately $135. As a result each of those systems saw its average price drop, by about $40 in the former case and $8 in the latter. (Consumers are now spending more on Nintendo DSi and DSi XL systems, on average, than they are on Wii systems.)
During the same period, the Xbox 360 saw its price increase by approximately $25. While the NPD Group won't speak to the specifics of a change like this, we suspect that part of the price increase may be related to the end of the Xbox 360 and Windows PC promotion that ran throughout the summer of this year.
Last month we hinted this role reversal could happen. At the time, we said “If consumers think that the Xbox 360 offers a better value, then the $50 PS3 price cut could bring the PS3's average price below that of the Xbox 360 without actually driving PS3 sales higher than Xbox 360 sales.”
That's precisely what happened in September 2011. Compared to its closest competitor, Microsoft is selling 12,000 more systems per week and at a $35 higher price.
From our experience, this is likely the first time that the Xbox 360 has exceeded the PS3 on average price. Going forward, the dynamic between the two consoles could change if price becomes a stronger determining factor in consumer choice.
In a communication to us about September sales, Wedbush analyst Michael Pachter described Xbox 360 sales as “defying gravity”, a turn of phrase we feel captures precisely the dynamics of the current market. While everyone else is treading water or eking out modest gains on hard-fought price cuts, Microsoft's sales are strong and its system prices are going up.
