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Wednesday, 11 March 2009 04:40

Console price reductions needed

Written by David Stellmack

ImageImage

Sales would increase if they cost less


Activision Blizzard CEO Bobby Kotick has been quoted as saying that given the current economic climate, cheaper consoles would be a spur to sales of both hardware and software.

It has been predicted that price cuts for the consoles would also be necessary in order for additional growth. Kotick, however, suggests that he does not see reductions coming anytime soon; but this flies in the face of what we have been hearing about expected reductions for both the PlayStation 3 and Xbox 360 that our sources claim will happen later this year.

Kotick also has joined other developers in saying that due to the fact that the Nintendo Wii has the largest installed user base, the company would be focusing more development effort on this platform. The news that Activision Blizzard is going to be developing more titles for the Wii comes as little surprise, since many other developers are in the process of going in this direction, as well.

The call for price cuts on the consoles really isn’t that much of a surprise. With recent cost reductions on both the PlayStation 3 and Xbox 360, our sources say that additional reductions are now possible. An expected price cut is said to be slated for the PlayStation 3 in the April time frame, but it might be only $50, which is half what analysts have be calling for.

As for the Xbox 360, Microsoft is said to be in a better position to cut prices if necessary, but our sources now suggest that Microsoft will only likely respond if Sony makes a reduction first. The cut would likely only apply to the Xbox 360 Pro system, and the current thinking is that Microsoft would slash the price $50 to $249 on the Pro System, which would still give them an advantage over the projected price cut of the PlayStation 3.

Sony is said to still be struggling with its ability to cut prices on the PlayStation 3 as we have reported previously. While they have been able to cut some costs on the console, the reductions are not as much as the company would have liked. Whispers continue to suggest that the Blu-ray drive is one of the main obstacles to making a deeper cut on the system, and while some rumors suggested the possibility of bringing out a lower cost version of the PlayStation 3 with a DVD drive, the logistics of such a move have led to this idea being trashed.

In the meantime, Microsoft continues to rack up a sales lead over the PlayStation 3, but still is trailing the Wii despite price cuts that have made the Xbox 360 Arcade $50 cheaper than the Wii. The broader range of titles targeted at both younger players as well as families seems to have really helped the Wii strengthen its position over the others.

Last modified on Wednesday, 11 March 2009 07:51
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