Bank of America analyst: PS3 price drop won’t cut it

With sales that placed Sony last in the next-gen console race, it’s almost inevitable that they cut the PS3’s price in the hopes that it would appeal to more people. Rumors say that the price will drop by $ 100, but analyst Mike Savner from Bank of America believes this may not be enough.

Taking off US$ 100 from PS3’s price tag still leaves it more expensive than the Xbox 360 and there’s a possibility that Microsoft would cut prices too. Savner advised that Sony can take US$ 150 – 200 off, but it’s not very likely since it would add to the hurt because Sony is losing about $ 200 per PS3 unit sold.

Even with price reductions, the PS3 will still have a hard time catching up in the console wars says Savner. “An important driver of Sony hardware last cycle was exclusive games, such as Grand Theft Auto,” he said, and the loss of exclusive games from third-party developers may greatly narrow the console’s sales.

On the other hand, the Wii taking more market share from PS3 and Xbox 360 could actually be a bad thing for publishers. Companies are starting to spend more and more money on research and development, but focusing on the Wii would give back relatively lower wholesale revenue. “While certain 3rd party publishers like Ubisoft, EA and Activision have shown some success on the Wii, Nintendo remains the dominant publisher on its platform.”

With a life expectancy of 10 years, it may be too early to judge how PS3 will fare in the future. There are still highly anticipated upcoming titles; some are said to “murder” the Wii, while some are from big franchises like Final Fantasy, Metal Gear Solid, and Devil May Cry. Savner doesn’t expect Sony to gain meaningful ground this year, but only time will tell.

Via Game Daily Biz

With sales that placed Sony last in the next-gen console race, it’s almost inevitable that they cut the PS3’s price in the hopes that it would appeal to more people. Rumors say that the price will drop by $ 100, but analyst Mike Savner from Bank of America believes this may not be enough.

Taking off US$ 100 from PS3’s price tag still leaves it more expensive than the Xbox 360 and there’s a possibility that Microsoft would cut prices too. Savner advised that Sony can take US$ 150 – 200 off, but it’s not very likely since it would add to the hurt because Sony is losing about $ 200 per PS3 unit sold.

Even with price reductions, the PS3 will still have a hard time catching up in the console wars says Savner. “An important driver of Sony hardware last cycle was exclusive games, such as Grand Theft Auto,” he said, and the loss of exclusive games from third-party developers may greatly narrow the console’s sales.

On the other hand, the Wii taking more market share from PS3 and Xbox 360 could actually be a bad thing for publishers. Companies are starting to spend more and more money on research and development, but focusing on the Wii would give back relatively lower wholesale revenue. “While certain 3rd party publishers like Ubisoft, EA and Activision have shown some success on the Wii, Nintendo remains the dominant publisher on its platform.”

With a life expectancy of 10 years, it may be too early to judge how PS3 will fare in the future. There are still highly anticipated upcoming titles; some are said to “murder” the Wii, while some are from big franchises like Final Fantasy, Metal Gear Solid, and Devil May Cry. Savner doesn’t expect Sony to gain meaningful ground this year, but only time will tell.

Via Game Daily Biz