If you're planning to buy a console this holiday season, you might be in luck. Analyst firm MKM Partners says that we can expect price cuts on both Sony and Microsoft products this year. The ailing economy is one probable reason for the cuts. Another are issues within the companies themselves.
Sony is in a seven-month-long decline, and their lackluster E3 showing certainly didn't help any. The PS3 is the most expensive console and it's also the one with the least broad appeal. We've been expecting to hear of some PlayStation price cuts for a while, so it's not too surprising that the analysts predicted a price cut.
MKM expects prices on the 160 GB system to drop by a cool $100, down to $399. They also predict the release of the long-awaited PS3 Slim, and the discontinuation of the 80GB PS3. The analysts think that Sony will look for inexpensive methods to boost sales, like bundling the PS3 with copies of Madden NFL 2010.
It's expected that Microsoft will react to Sony's massive price cuts. They won't want to lose the price war with Sony, but they're not going to be the first ones to slash profits. MKM thinks Microsoft will only need to cut about $50 to remain competitive with Sony.
Nintendo has proved more difficult for the analysts to predict. Some say that what it does will depend on how well the new peripheral launching this year does. If sales here match the success in Japan, Nintendo might not need to cut at all. One analyst, though, states that Nintendo will need to cut prices if they want to reach their full-year Wii shipment forecast.
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A price drop will be really good for both consumers and game developers. More consoles sold means more games purchased. I think that's why Nintendo will end up cutting prices this year. They have a huge selection of peripherals now, and a drop in price would also increase the sales of those. Nintendo is definitely in the position of power here, though, and they can keep going just fine without slashing prices this year.