Wedbush Morgan’s Michael Pachter believes that the new price scheme for PS3 and Xbox 360 has put pressure on Wii, and expects a sales growth for PS3 in September; therefore a price cut is necessary for Wii to continue to compete in the market.
“Until the late August PS3 price cut, the Xbox 360 appealed to consumers, likely due to a higher perceived value proposition (the Xbox 360 ‘core’ model was priced $100 lower than the PS3),” he wrote. “With the core PS3 and Xbox 360 models priced only $50 higher than the Wii, we expect year-over-year sales of Wii hardware to continue their annual declines until the company either changes its bundle or lowers price.
“Wii unit sales are 50% below last year’s level over the last five months, and we think that September sales will repeat the pattern.
“The late August price cut for the PS3 clearly drove a pickup in demand, with that console’s sales up 73 percent sequentially, and we expect another 50 – 100 percent sales growth in September.”
The NPD figures for August showed a hardware sales were down 25 percent with Wii selling 277,000 units representing a 39 percent decline. Xbox 360 blew through 215,000 units garnering a 10 percent increase, while Sony’s PS3 moved 210,000 units and jumped 13 percent in sales, which is a 73 percent increase from July’s numbers.