Console price cuts predicted for 2011

Ben Parfitt
Console price cuts predicted for 2011

Economic weakness, a change to the traditional hardware cycle, the growth of digital - there are plenty of things we can point the finger at when trying to assess the declines seen in all of the major games markets last year.

But Wedbush Morgan analyst Michael Pachter has footed responsibility squarely at the feet of platform holders and their unwillingness to slash hardware RRP as much as he feels was needed.

Furthermore, he expects Sony to move first. And if all three companies do play ball he predicts 2011 could see a return to growth for the sector.

"We believe that sticky price points for the three major consoles triggered a five per cent overall decline in console hardware unit sales for 2010," he said in a report to investors.

"We fully expect each of the three consoles to be offered at lower prices in 2011, with Sony likely leading the way as its manufacturing costs continue to decline

"A $50 price cut should be sufficient to drive five per cent software sales growth and, coupled with a resurgence in handheld software sales and an easy comparison for music sales, we think that overall software sales growth could hit low double digits in 2011."

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Tags: Hardware , ps3 , xbox 360 , wii , console , price cuts

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