Analysis: Xbox 360 Price Drop Not Hindering PS3 Sales

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When Microsoft decided to slash prices on the Xbox 360 - standard 60GB model down to $299, 120GB HDMI-ready model down to $399, and the Arcade model down to $199 - everyone expected fairly obvious results: sales would rise while sales of competitors would take a hit. However, according to EEDAR's Jesse Divnich's recent analysis of September's NPD numbers, PS3 sales haven't been adversely affected.

As his breakdown over at Gamasutra indicates, Divnich says that in looking at the data, "a price cut from either system plays a minimal role in affecting the others' sales." For example, after the 360 price cut, sales of Microsoft's next-gen console did leap 42%, but PS3 sales remained almost perfectly steady; they actually showed a tiny increase of .1%. On that same token, when Sony dropped the price of the PS3 in July of 2007, this didn't seem to have any effect on the 360, which enjoyed a 7% rise in sales that same month. Divnich admits he's only using a relatively small sample to make his conclusions, but so far, the theory is being proven correct this generation.

"While I still maintain my original analysis that the current PlayStation 3 price point is too steep to spur sales this holiday season, it may not affect its overall potential install base in the end. In other words, those potential PlayStation 3 owners who are turned off by the current high price point may just delay their purchase until prices come down, instead of buying the cheaper Xbox 360."

In the end, we also have to add that software still drives hardware sales. Perhaps the reason sales of the 360 didn't dive when Sony cut the PS3 price last July was because the 360 still had far more games, and we didn't have many at all for the PS3 yet. And this time, when Microsoft dropped the 360 price, the PS3 had already come into its own; people still wanted it for established masterpieces like Metal Gear Solid 4: Guns of the Patriots and future exclusive gems like LittleBigPlanet and Resistance 2. Just a thought, but we think it's viable.

10/20/2008 Ben Dutka

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