Business Week has a story headlined PS3 Price Cut Too Little Too Late based on quotes from Bank of America analyst Michael L Savner. The story says:
"Despite growing anticipation that a $100 price cut for the PS3 is imminent this summer or early fall, we do not believe such a move would meaningfully improve stagnant PS3 sales and we are growing more concerned that a share shift away from Sony and Microsoft to Nintendo's Wii platform is incrementally negative of all 3rd-party publishers," Savner said.
He continued, "Based on our analysis, we conclude that a $100 price cut for the PS3 (we have dismissed a potential $50 cut as meaningless) would still leave the 'all-in' cost for a PS3 console and basic accoutrements 20-25% higher than the comparable Xbox 360, and does not even reflect the possibility that Microsoft could also lower its hardware prices."
Sony's price-cuttng options are limited because it's "losing approximately $200 per console at $599, based on our estimates," says Savner.
The move to Nintendo is "negative of all 3rd-party publishers" because Nintendo dominates the markets for Nintendo games. This is bad news for companies such as EA: they have invested heavily in next-generation development for PS3 and Xbox 360 games. It's also bad news for Sony, because the profits from games and licenses is supposed to make up for the loss on hardware.
Thanks to GamesIndustry.biz for the link.
