E3 07: Analysts expect Xbox 360 price drop
SANTA MONICA, California.--The E3 Media and Business Summit hasn't even started yet, and the big news has already started to break. Shortly after Sony announced it was lopping off US$100 from the 60GB PlayStation 3 and releasing a new 80GB model bundled with MotorStorm in August, a handful of industry analysts have sent out investor notes with their own predictions for the show. Each of them had addressed the distinct possibility of Microsoft announcing a price cut for the Xbox 360.
Lazard Capital Markets' Colin Sebastian, Wedbush Morgan Securities' Michael Pachter, Oppenheimer's Shawn Milne, and Nollenberger Capital Partners' Todd Greenwald all brought up the possibility of an Xbox 360 price cut, but they differed on how much the cut would be and when it would be revealed.
Pachter suggested Microsoft would cut the price of the Elite model of Xbox 360 from US$479 to US$399, with the Pro and Core packages shedding US$50 each, to US$349 and US$249, respectively.
"On balance, we think that the lower US$499 price point for the PS3 60GB model offers consumers a compelling value compared to the current US$479 price point for the Xbox 360 Elite model," Pachter wrote. "While the Elite has a 120GB hard drive and HDMI cables, it does not have WiFi built in nor does it offer Blu-ray playback capability, with both standard features for the PS3. Similarly, we think that the US$499 PS3 compares quite favorably with the US$399 Pro 360 model, which has only a 20GB hard drive and no HDMI output. Because of this favorable comparison, we believe that Microsoft is all but compelled to cut prices, and we think the price cuts will come no later than at Microsoft's Tuesday night press conference."
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