Analyst: $59 Price Point “Safe” in ’09
A slew of relatively new games recently received price cuts at retail, causing some industry watchers to become concerned about potential flagging consumer acceptance of the $59 price tag for front-line PS3 and Xbox 360 games.
But analyst Todd Greenwald with Signal Hill assured in a Monday research note that the $59 price tag for new releases will continue to be the standard this year, despite discounts on certain software.
"If triple-A titles start to go out at $49.99, we will be very concerned, but until then, we think $59.99 is safe for triple-A titles in 2009," he wrote.
Still, he called software pricing "one of the biggest question marks in 2009," calling the demise of the $59 price point for Xbox 360 and PS3 software "the biggest risk facing all publishers." An across-the-board slashing of the current pricing would be "devastating for margins," the analyst stated.
Some games that publishers and retailers recently discounted include Mirror’s Edge, Madden, Guitar Hero, Saints Row 2 and Prince of Persia.
Greenwald reminded investors that it’s more important to note how much newly-released games are selling for instead of worrying too much about the price of three- to four-month-old games. For now, $59 appears to be holding up, he said. "…Lord of the Rings from EA launched at $59.99 and remains there. Skate 2, also from EA (which is typically the first publisher to cut prices), launched at $59.99 and is off to a good start."