GameStop Management Expecting 'Meaningful' PS3 Price Cut, says Analyst

At this year's E3, a number of publishers expressed their disappointment (either privately or publicly) about the lack of any price drop on Sony's PlayStation 3. Activision Blizzard chief executive Bobby Kotick took it one step further recently, practically threatening to cut off support of the console because “it's expensive to develop for the console, and the Wii and the Xbox are just selling better. Games generate a better return on invested capital on the Xbox than on the PlayStation.” 

The rumors continue to swirl that Sony will finally act and drop the PS3's MSRP by $100 for August (in time for the launch of Madden) and now leading video game retailer GameStop is expecting a price drop too. According to Sterne Agee analyst Arvind Bhatia, who attended a meeting with GameStop executives, “Management believes that a meaningful PS3 cut is highly likely in the near-term. We continue to believe a $100 price cut on PS3 will occur around the launch of EA’s Madden NFL 2010, which is scheduled for release on 8/18.” 

Furthermore, Bhatia now says that the probability of a price cut (likely $50) on Nintendo's Wii is going up. “Logically, if Sony cuts the price of PS3 to $299, Nintendo may be forced to cut to maintain sufficient price differential versus the PS3 and 360. In other words, hardware sales, while slow now, are about to get a boost in the near-term driven by price cuts,” he noted. 

At this point, IndustryGamers is all but certain that a price cut on PS3 is coming this year. Sony really has very little choice if they wish to stay competitive. We're slightly less convinced that Nintendo will drop price on Wii. Although sales have slowed in recent months, we think the upcoming Wii MotionPlus and Wii Sports Resort could stimulate further hardware sales. We'll be watching closely.