Analysts on the console war, after Xbox 360 announces price cut
Now that Europe’s Xbox 360 price cut has just been confirmed by Microsoft, analysts Michael Pachter and Jesse Divnich give their views once again. They talk about the future of the consoles now that the format war is over, and what’s in store for the PlayStation 3 and Xbox 360 now that Microsoft is introducing a price cut. Details in the full article.
Gamers in Europe were given a treat by Microsoft earlier when it confirmed the price cut of the Xbox 360, which shaved off about US$ 100 from the tag. The chess pieces are now moving again, as Jesse Divnich might put it (he likens the format wars to chess).
Divnich and Michael Pachter, analysts of the video game industry for simExchange and WedBush Morgan respectively, have given their opinions on the price cut. The verdict? They both agree that the cut would boost Xbox 360 sales (a no brainer).
What’s in store for Microsoft and Sony
However, Pachter adds that the price cut would likely cause Sony to introduce a price cut on their console as well. He also believes that the 360 price cut was a result of Blu-ray’s success over HD DVD:
I’m sure it is more than coincidence that Microsoft cut price just after Sony won the Blu-ray / HD-DVD battle. Sony definitely gained in the eyes of consumers, who suddenly see the premium for the PlayStation 3 as having some value, and I think Microsoft decided to widen the gap between the two consoles.
Divnich believes that the price cut will give Microsoft the edge for only a short period of time until Sony can react (perhaps with a price cut, as Pachter suggests). However, he also believes that the price cut also give the Xbox 360 the edge over games:
A price cut will also position Microsoft to take advantage of some of the upcoming releases such as Rainbow Six: Vegas 2 and Grand Theft Auto 4, both of which are multi-platform titles and definite hardware drivers.
Divnich on the strengths and weaknesses of each console
Divnich goes on to add that Microsoft needs to continue developing Xbox Live, saying that this is the 360’s advantage over PSN: “PlayStation Network will never be able to compete against the level of service that Xbox Live can provide.”
On the other hand, he does state the the PS3’s advantage over the Xbox 360 is its capabilities as a media device, especially after its victory in the format war: “Sony must continue to push for stronger adoption rates of not only high-definition televisions, but its own Blu-Ray disc players.”
Divnich closes by talking about the Wii, saying that Nintendo has no worries with the competition:
The Wii is of course always special and I don’t think either the PS3 or the Xbox 360 will ever be able to compete against it – no matter how low either of them drops their price. The Wii just simply offers an experience unparalleled to what any other system can provide. The price is not the selling point of the Wii.