Pachter: Console price cuts ‘imminent’

San Francisco (CA) – Wedbush Morgan analyst Michael Pachter has predicted the ‘imminent’
implementation of console price cuts. According to Pachter,
manufacturers made a strategic error by maintaining current price
points 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,” said Pachter. “We think that the negative software trend is less attributable to a weak software lineup, 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. Fortunately, we anticipate imminent price cuts to occur soon.”

Pachter also commented on the parameters of a possible PS3 price cut and Microsoft’s expected Xbox 360 upgrade.

“One 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 repricing the 120 Gb Xbox 360 Elite at $249,” explained Pachter. “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 Xbox360 packaging appear real to us.”

However, the analyst noted that actual pricing had not yet been leaked and emphasized that rumors of a $299 PS3 or a $249 Xbox 360 were “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,” added Pachter.