EEDAR on NPD: 360/PS3 Price Cuts In Sight, Industry Remains Robust

Consumers might be seeing price cuts for Xbox 360 or PlayStation 3 in the coming months, claimed analyst Jesse Divnich of research firm EEDAR in a report sent to Gamasutra following today's NPD sales figures for March. Divnich pointed to the lower-than-expected sales of Xbox 360 and PS3 as evidence that the systems might be plateauing. "These hardware results would indicate that both systems have likely saturated their potential market at their current price points," he wrote. "If we do not see any price cuts in the coming weeks, we can likely expect some hardware cuts once GTA IV loses some steam (before July) or if the GTA IV release significantly drives hardware sales for one console over the other." Still, he cautioned against being too expectant of an adjustment. "It would be erroneous to start shouting price cuts as we are only a few weeks away from one of the big releases in gaming (GTA IV)," he admitted. "March’s hardware results could very well be the 'calm before the storm. '" As for why the systems performed as they did, Divnich points to a lack of high-profile flagship releases. "In terms of the continued battle between the PS3 and Xbox 360 we were not surprised that both consoles fell relatively close to each other as neither system offered any significant first party releases or new promotions to sway the trends," he said. "A Perfect Storm" All in all, however, Divnich was very pleased with March's strong numbers. Continuing his meteorological metaphor, he said today's NPD figures illustrate a "'perfect storm' for new releases," calling the industry's performance "nothing short of impeccable." "March has shown us that the industry is finally large enough to support numerous AAA titles during an off-season month and going forward, publishers need not fear a PS3/Xbox 360 title hindering their Wii title (or vice versa)," said Divnich. "March has proven that the PS3/Xbox 360 and the Wii can co-exist perfectly together." The analyst expects Nintendo's performance, which in March was driven by 2.7 million units sold of Super Smash Bros. Brawl, to remain strong as more marquee titles are released. "We should continue to see monthly Wii hardware sales in the 600k to 700k range through the next couple of months as Nintendo will ensure strong hardware support for the upcoming Mario Kart Wii and Wii Fit release," he said. "The Nintendo DS will see similar success through the summer as it continues to offer one of the cheapest entry points among the hardware systems." Almost paradoxically, the video game industry continues to weather the consumer spending drop that is affecting other areas of the economy. "At this point one could make a strong argument that there is an inverse correlation between our current economical state and the health of the video game industry," said Divnich. "These results only reinforce previous assumptions that the video game industry offers the best value in terms of entertainment, especially during tough economic times when inflation is on the rise and gas prices continue to push record highs."