360 price cut to boost sales 20 per cent – Pachter

Following Microsoft's decision to drop the price of the Xbox 360 in Europe, analyst Michael Pachter has told GamesIndustry.biz that he expects sales to increase by around 20 per cent over the coming months.

However, in the long term, he doesn't see it making a larger impact to Microsoft's standing in the region, as Sony is also likely to cut the price of the PlayStation 3 at some point later this year.

"Price elasticity of demand is an economic concept that says demand goes up as price comes down. I would imagine that demand will increase by 20 per cent or so, and we'll see sales increase by this amount over the next few months," offered Pachter.

[DarkSniper]

Michael Pachter is usually correct on these issues. Out of the many gaming industry analysts, he is the most respected and most reputable. Xbox 360 will see a short spike in sales and then follow by plummeting down in a sorrier state than it is now.

$niper

[ruibing]

So I'm guessing their supply issue has been solved?

[captainjy]

Here's the interesting part of all this 360 vs. POS3 drama-

Even with all of the hardware failures and I won't deny hardware failures because I have had one, is still outselling the POS3.

Even without Blu-Ray, the 360 is outselling the POS3.

Even without a "FREE" online service (God knows, you have to have games and not movies before you can actually play), the 360 is outselling the POS3.

Even without built-in Wi-Fi and a desktop HD (that's hard drive for the inexperienced), the 360 is still outselling the POS3.

Everything above speaks volumes as to what the POS3 is: it's overpriced. It's pathetic. And it's not the behemoth that it used to be. I don't care how many POS2's there are in the world. We are past that. Here and now, this 360 gaming console that supposedly has so much less and is a bigger hunk a junk is doing in your mighty movie machine.

[Captain Tuttle]

Has Sony even hinted at a price cut? If that happens that's good news for gamers. I love price wars.

[blacsheep]

and pachters (who i think has got so many predictions wrong this gen) is just really stating the obvious, price cuts will lead to an increase in sales you dont to be an analyst to know that.

the only winners in this price war are us the consumers so enjoy and game on

[Silver360]

Why would Sony cut the price of their system unless they start selling less systems.

[masterg]

Pachter is actually the analyst who has gotten most correct.
Kotaku did an article on it.

[niall77]

well done Pachter, have a biscit

[CrazzyMan]

To outsell ps3 in Europe, x360 need 100% boost, not 20%. =))

20%? Sad.. very sad things are then for M$. =)
I wonder, will they even make money on x360 after pricecut or will start losing them again? =]

[green]

he has come again with his predictions.This guy is like a flag that turns to any direction the wind is blowing

[kewlkat007]

and new Owners, that can somehow afford the console. I can't be sour I paid much more for mine.

Of course others will be "sour" for specific reasons..haha

[Sir Ken Kutaragi 3]

Does he mean 20% more Red Ring of Death!!! ;-D
What a waste of time and money buying a xBox360!!!

[bootsielon]

"Price elasticity of demand is an economic concept that says demand goes up as price comes down. I would imagine that demand will increase by 20 per cent or so, and we'll see sales increase by this amount over the next few months,"

Demand doesn't go up as price goes down, especially not for all goods. I think he should have said that there is MORE DEMAND for lower prices. The demand already exists, but it doesn't come into fruition unless the prices go low. And that doesn't happen for every kind of good, some things don't sell more just because you dropped their price, and some things sell more if you raise the price (diamonds and other luxury goods, for example). Semantics, I guess, but he's an analyst. Then again, I'll give him the benefit of the doubt and assume he's using language so that the non-economically cultured understand.

Then again, you could say that demand does raise a little, but that's only because consumers aren't entirely rational, but rather, compulsive. A price drop sounds everyone's "buy it now" alarms, regardless of if they were gonna buy a good at that particular price to begin with; it's the hype of the moment. Which is why it's good to have a relatively expensive console, since you get to drop the price many times early in its life, if you know how to cost reduce. The bad side of a high initial price is that if you go too high you also turn off a lot of prospective consumers.

[doodle]

x360 is bought mainly by old XBOX owners

There are far more PS2 owners than XBOX owners.

around 60% of xbox owners have already converted to X360

It is just the PS2 owners who would be converting to PS3 with GTA4 and MGS4 + other big titles this year

[captainjy]

doodle, please don't ever post again because you seriously have no clue what you are talking about it. You need to just copy and paste what the guy below you typed and then give your POS3 away and buy a 360.

[power of Green]

People still listen to this guy?. He doesn't know if the sales will increase by 20%(mass market range? and only %20 for a short time?) he doesn't know what games will be out that can change or override brand loyality(secret non shooter can change everything regardless of Sony loyality).

[doodle]

But excepting UK ...XBUG 3 FIX ME is dead all over eu excluding UK

U GARBAGE BOT you know it even better that DEAD BOX 3 FIX ME is simply dead in EU . Price cut wont revive a DEAD CONSOLE

[Ghoul]

well sure it boosts sales but i know noone who will be attracted by that pricecut, my casual game colleagues and friends owe/will buy the wii.

and the ones with an hdtv and dolbysurround homecinema buy a ps3 :)

i honestly think the 360 is done this gen 08 is the last year for the 360 until it will be totally run over by ps3/wii

ignore USA couse they are the only ones keeping the 360 sales up without the us the 360 would have been a failure

[meepmoopmeep]

it will spike in sales now, but it's the long run that matters.

[Sir Ken Kutaragi 3]

I got banned from the 'Gaming Zone' for NO REASON???????
This site SU*CKS!!! :-/
When i put a comment on the 'Gamer Zone' im not rude or nothing???
Bet you i upset some poor little xBot(Yep!i don't use words like that on the Gamer Zone!!!)and he reported it to N4G&Micro$oft!!!
:-/
+Some guy said today on the 'Gamer Zone'(should say 'Censorship Zone!')
that xBox360 GTA4 is the better version!!! I put 'Er i don't think so!'
And i get banned for that????????? SAD!!! :-/

[AceLuby]

Why have a price cut when you have supply problems?

[meepmoopmeep]

wow, you made a very good point here... that's very interesting indeed

[etownone]

obviously it is all part of their plan.

They do a measly little $50 price drop after TWO years while PS3 has TWO huge price drops in its first year.

This is the time, PS3 is gaining momentum and you have the BIGGEST and best selling game of the year right aroung the corner, GTA4, which will sell consoles. Now what do you think all those cheap AZZ PS2 owners out there, that haven't jumped in to this gen, are going to buy when they see a 360 for $199?? compared to ps3 at double the price?

[AceLuby]

Is that a price cut at this point is ridiculous. What would you say if the Wii had a price cut? Unnecessary right? Well if the 360 cannot supply enough for the demand now, why generate more demand?

[etownone]

They have already gone on record saying they will have enough 360's in store selves come GTA4 time. Whatever supply problems they have, have already been fixed, or will be come April.

They are BANKING and waiting to see how and if GTA4 affect console sales. Its their one-two punch, $199 (mass market sweet spot) plus GTA4 with exclusive DLC (most likely best selling game of the year)

[InYourMom]

for the USA, they never had supply problems in Europe where this price change is happening.

[SKUD]

yawn....

[MaximusPrime]

20%?

Im not going to be in that 20%. Why? Xbox 360 causes me lots of grief a year ago. I never trusted M$.

Really it should be less than 5%. Why? M$ already lost customers through RRoD issue, worst customer service, pay for online gaming, too many FPS. Not even family friendly console.

[heyheyhey]

same

the 360 doesn't interest me in the slightest

perhaps if it comes down to £150 or something, and only if RROD is completely resolved

i only want NG2 and Gears 2 from the 360 (maybe Fable 2 and Too Human), but i can play those on my friends 360

all the rest are on PC

[captainjy]

Hahahaha! That's most moronic thing I have ever heard, but you'll trust Phony??!?! Hahahahahhaha! Phony still cringes when you bring up the rootkit. Do you even know what that was? Naive people man...

[etownone]

IMO, this is HUGE news, a $199 arcade?!

also, IMO, as stupid as this may sound to some people, I beleive having the arcade around is great, especially for people that still dont have a HDTV (no HD cables) or internet (no hard drive)....

I know alot of you think MS should drop the arcade, whereas I beleive they should drop the Pro. Yep. And drop the price of the elite to $299. And just sell the hard drives at 20 and 160 gig separately at reasonable prices (not no freakin $99 for a 20 gig!! more like $35 for the 20 gig and $100 for the 160 gig.

[whoelse]

Not much then.

I too think Sony will cut the price, but not until autumn in Europe. Unless the 360 price cut has a bigger than expected impact on sales.