Price Cuts May Not Be Enough to Save Sales


Marking down prices on consoles might help sales this year, but it won’t be enough to simulate sales the way companies are hoping they will, one analyst thinks.

Price cuts have historically been one surefire way to significantly boost sales of consoles, but it might not be enough this time around, analyst Doug Creutz of Cowan and Company thinks. That’s because of the gloomy state of the economy, and the various financial pressures that consumers are facing nowadays. With all those compounded problems, it might take more than slashed price tags to liven up hardware sales.

“We are concerned that, given pressures on the consumer, price cuts may not have the stimulative impact to hardware and software sales that they have had in the past,” Creutz told investors.

Not that there won’t be benefits – there will be some, that is, if you think of price cuts as sure a thing as Creutz seems to. “We expect hardware price cuts on all platforms by September, with announcements possibly as early as next week’s Gamescom,” he said. Creutz predicted a $100 price cut for the PS3, a $50 drop for the Wii and Microsoft to drop the Elite to $300.

The Elite prediction in particular echoes rumors from yesterday which emerged from a retail catalog listing the Elite for that price, lending some weight to the rumor that the Elite would become cheaper and the Pro SKU would be entirely phased out.

Though the three console makers have consistently denied plans for price reductions or new models, I wouldn’t be surprised if Creutz is right and we hear something before month’s end. Price cuts might not be enough, but really, what else can you do?


About the author