We're getting to the point in the respective life-cycles of Xbox 360, Wii and PS3 where all three could certainly benefit from another price cut. It's likely we'll see one or more drop price during 2011, and if Sony wants to hold onto some of the PS3 momentum it's gained, it would be smart for Sony to lower price soon.
Wedbush Securities analyst Michael Pachter has noted that the Wii's not doing so well, and both PS3 and Xbox 360 have an opportunity to further hack away at Nintendo's market share this year. Price cuts could be key.
"Despite the introduction of 3DS at the end of FY:11, we believe Nintendo sales could be flat (or possibly decline) in FY:12 without a new Wii model, especially as competitive hardware from Microsoft and Sony comes down in price. The Microsoft Kinect (launched in November) and PlayStation Move (launched in September) are each vying for a large portion of the Wii’s traditional market, casual gamers. We believe the Kinect in particular has had a very strong debut, and view it as a legitimate substitute to the Wii, especially at the Arcade bundle price of $299. Sony will likely have to lower the price of its PS3 bundle next year in order to take significantshare from Nintendo, and we don’t expect that to occur until mid-year at the earliest," Pachter said.
"Once Microsoft and Sony cut prices, we think that Nintendo will have little choice but to do the same, further pressuring revenues and margins."
