When Sony first confirmed that the 60GB PlayStation 3 would receive a price drop, gamers cheered, but when it was revealed soon thereafter that the price reduction to $499 was to help clear out the remaining 60GB inventory, those cheers quickly died down. But there may be cause for celebration again if the analysts are right.
With supplies of the 60GB model starting to dry up at retail, analysts believe that Sony will cut the price on the 80GB model down to $499 in time for the 2007 holiday season.
Wedbush Morgan Securities analyst Michael Pachter said in his latest report, "We note that Sony recently acknowledged that it will no longer produce its 60Gb PS3, and we expect the price of the 80Gb PS3 to be reduced to $499 before the holidays, maintaining a premium SKU at that price point."
Pachter added that he also envisions a further price reduction in the early part of next year to coincide with some hotly anticipated titles. "Any hardware price reduction could serve as a catalyst for sales growth later in the year. We do expect Sony to again be in a position to cut the price of the PS3 in early 2008, when blockbuster games Grand Theft Auto IV and PS3 exclusive Metal Gear Solid 4 will launch," he said.
Along with Pachter's report, a note from Jesse Divnich, an analyst with the simExchange, a video game prediction market, said, "After examining more closely the hardware sales of the PS3 over the last 6 months we have come to the conclusion that the PS3 cannot remain competitive in the current North American environment at its current retail offering at $499 and $599."
"To remain competitive against the other consoles, the Sony PS3 would have to reduce its 80GB SKU by $100 down to $499," Divnich continued. "Other options, besides a price drop, could be the bundling of more free software titles, which has always been a popular option during the Holiday season."
Trading on the simExchange predicts that the Xbox 360 may outsell the PS3 by 2 to 1 over the holiday season (the three-month October to December period). Although Sony may incur further financial losses from another price cut, Divnich believes the company has to make a move.
"Sony's third party software support could be at serious risk if they allow Microsoft to continue to widen the sales gab. We are already seeing examples in the market of their deteriorating third-party software support. Titles like EA's SKATE, EA's Medal of Honor, EA's Half-Life 2, and Midway's Stranglehold are just some of the titles being released on the Xbox360 first with a delayed PS3 release date," said Divnich. "... In other words, at any given point through the development process, the PS3 SKU is always weeks behind the Xbox 360 SKU, which results in the later release date for the PS3 SKU."
by James Brightman
source:gamedaily.com
