IndustryGamers - Informing the Games Industry

Pachter: PS3 to Continue Outselling Xbox 360, Prompting 360 Price Cut

Posted December 7, 2009 by James Brightman

With NPD's November data coming later this week, Wedbush Morgan analyst Michael Pachter has issued his preview note, predicting software sales growth of 7% to $1.55 billion, largely on the strength of the record-setting Modern Warfare 2 launch. In terms of hardware, Pachter sees Nintendo dominating, following its incredible Thanksgiving week. His hardware forecast is as follows:

• Wii: 1.05 million units
• PS3: 700,000 units
• Xbox 360: 650,000 units
• DS: 1.535 million units
• PSP: 290,000 units
• PS2: 175,000 units

Despite the big hardware numbers, Pachter expects an overall decline in unit sales of 26% for the three consoles combined, thanks to a tough comparison with last November when the Wii sold over 2 million units. Prior to then, only the PS2 had ever sold more than one million units in a November, with just under 1.3 million PS2s sold in November 2002, he pointed out.

Looking at the numbers, Pachter sees an advantage for PS3 and he thinks Microsoft may need to cut price again in 2010. "We expect the recent round of price cuts to continue to benefit the PS3 the most in coming months, as the Wii and Xbox 360 face more difficult comparisons. PS3 unit sales last year were 1.1 million for the November–December 2008 period (compared with 2.3 million for Xbox 360 and 4.2 million for Wii). The Xbox 360 outsold the PS3 for 13 consecutive months until September, likely due to a higher perceived value proposition. (The Xbox 360 “core” model was priced $100 lower than the PS3.) We think that the PS3 will again outsell the Xbox 360 in November and December, prompting a price cut some time early next year," he said. "Microsoft has the ability to lower price yet again, but we anticipate the introduction of a more feature-packed Xbox 360 in early 2010 (likely with a 250Gb hard drive) at the same $299 price point; we think that Microsoft will cut price only if it begins to lose significant market share to Sony."

As for the portable systems, he added, "The PSP Go launched on October 1 to little fanfare, and we do not see dramatic sales gains for that device. We believe Nintendo’s DS biggest sales challenge will be its own high installed base (34 million in the U.S.), and expect that some time in 2010, DS sales will begin to decline."

James Brightman has been covering the games industry since 2003 and has been an avid gamer ever since the days of Atari and Intellivision. He was previously the EIC of GameDaily Biz.