Hardware Price Cuts Might Not Rescue Sales – Analyst

Hardware Price Cuts Might Not Rescue Sales - Analyst

Cowen Group analyst Doug Creutz has questioned whether expected upcoming hardware price cuts can rescue flagging console and software sales.

According to Creutz, investors are anticipating a $100 cut on the PS3, a $50 cut on the Wii, and the Xbox 360 Elite to receive a new price point of $300. The analyst forecasts hardware price cuts “on all platforms by September, with announcements possibly as early as next week’s Gamescom in Leipzig.”

However, he thinks that these prospective cuts might not be enough to effectively address declining sales in the current marketplace.

“… We are concerned that, given pressures on the consumer, price cuts may not have the stimulative impact to hardware and software sales that they have had in the past,” he said.

Creutz expects US software sales to suffer a fifth consecutive month of year-over-year decline when July games industry data is released by the NPD Group after market close today. He predicts software sales to be down by 23 per cent. Other analysts have forecast a 15-16 per cent drop in monthly US game sales.