Nintendo to feel price cut pressure after E3?

By Mike Bantick
Monday, 16 June 2008 12:10

Opinion and Analysis

The rumours are building: As the PlayStation 3 beats Xbox 360 sales during May , the talk is that the Electronic Entertainment Expo (E3) in July might see Microsoft introduce price cutting across the Xbox 360 range.  If so, we might finally see some pressure on the all conquering Wii.

Though there are some nice Xbox 360 exclusives on the horizon (Too Human, Fable 2, Alan Wake to drop a few), the future retail success of the Xbox 360 hardware is looking a little shaky.

In the normally rock-solid homeland of the U.S.A the 360 has slipped to third place behind Nintendo’s Wii and Sony’s PlayStation 3 in recent months.

Back in August 2007, Microsoft injected some sales life into the Xbox 360 range by cutting retail prices across the board.  The Arcade model offering at US$297.99 was set to compete directly with the Wii

PS3 exclusives such as Metal Gear Solid 4 and the upcoming Little Big Planet will grind the screws even further on Microsofts gaming platform.

Rumours are now building that the July Electronic Entertainment Expo could see Microsoft drop a re-pricing bomb shell on the market. 

"With E3 around the corner, we can expect Microsoft to make some type of announcement regarding a hardware price cut, the introductory of a new hardware SKU with new features, or both. If there is a hardware price cut, it is not known if Sony will follow suit right way, but it would be safe to assume that Sony would execute some type of plan within a 2 month window of any hardware price cut from the Xbox 360." Said EEDAR analyst Jesse Divinch.

Michael Pachter, analyst with Wedbush Morgan tends to agree , though he takes it further to indicate Sony should also be looking at a price drop in the near future: "I don't really think that Microsoft and Sony are doing badly - just doing badly in comparison to Nintendo. It makes sense that PS3 and 360 are doing about the same... instead of saying 'what's wrong with Sony and Microsoft,' we should be looking at Nintendo and saying, 'how the hell do they keep doing this?'"

"You'll get a price cut," said Pachter. "I think if I were Sony, I would wait for the Fall, or for the Christmas lineup. There's no reason for them to cut it today [with MGS 4 out]. They'll go $100 if they can afford to." Furthermore, he went on to say that Sony may take advantage of LittleBigPlanet and potentially release a "family bundle" of sorts.