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Analysts: Software Slide In 2009, Price Cuts Probable

The NPD will soon publish its first-half report for 2009 but before the numbers come in, both Jesse Divnich of Electronic Entertainment Design and Research and Michael Pachter of Wedbush Morgan Securities have issued their predictions.

First, Divnich believes we'll see a 20% decrease - down to $697 million - in year-over-year software sales while Pachter's prediction is similar; he believes it'll be down 23% to $670 million. As a direct result, Divnich says EEDAR will be "lowering full-year software growth estimates for 2009 from 7% to 5%," although Pachter reiterates his belief that the industry is "highly recession-resistant." Both analysts agree that Activision's Prototype will be the leader in June sales, and Divnich pointed out something interesting in regards to the inevitable Prototype/inFamous comparison:

"Infamous is currently on track to sell 35 percent more than Prototype for the PS3 in North America. Lifetime sales could outpace Infamous over Prototype by as much as 50 percent due to the longer sales curve exclusive titles receive. Due to near identical gameplay and quality scores, the Infamous vs. Prototype case study presents interesting data to publishers when considering the sales bump a title could receive by choosing exclusivity over a multiplatform release."

That's intriguing, isn't it? There's always something worth talking about when an exclusive is compared to a multiplatform title, especially when there are solid arguments for both. Anyway, Pachter went on to discuss the greater potential for price cuts in light of these impending results, and he even believes the Wii may have to see a price drop later this year. Said Pachter:

"We think that the console manufacturers will therefore be forced to consider a price cut before year-end, with Sony cutting the PS3's price by October 1. Further, we do not think that Nintendo's hardware forecast figures are achievable without a price cut, and we expect one around the same time as the PS3 price cut. It is likely both manufacturers will cut by $50, with Sony making up any lack of increased demand with a software bundle. We expect Microsoft to follow suit, giving us confidence that US software sales will grow later in the year."

Every time we see another analyst talk about a PS3 price cut, they essentially refer to it as an inevitability. We certainly think it'll be coming at some point, but the biggest rumor now involves the PS3 Slim; if it exists, will it also represent the long-awaited price reduction? Only time will tell...

7/13/2009 Ben Dutka

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Comments (28 posts)

Highlander
Monday, July 13, 2009 @ 3:35:53 PM
Reply

To these two 'analysts', I'd like to say, "It's the recession stupid". When people talk about drops in sales of luxury consumer goods, that's the answer. And the way to fix it isn't to drop prices (although that will happen) it's to wait out the storm. Trying to sell luxury goods during a recession by cutting their price is like trying to turn the tide by throwing sand at it. Sure sand may slow the water for a short while, but after a while the tide overtakes the sand, and ultimately the tide retreats on it's own.

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WorldEndsWithMe
Monday, July 13, 2009 @ 5:38:07 PM

Been hangin out at the beach dude?

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Fane1024
Monday, July 13, 2009 @ 8:37:24 PM

More likely reason: no GTAIV, no MGS4.

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xnonsuchx
Monday, July 13, 2009 @ 3:36:39 PM
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Kinda getting sick of all these analysts' half-baked predictions. Do they ever think companies might be fine with lower PROFITS insread of LOSSES? Oh yeah, in their mind, those are the same thing. Sometimes, they even think not hitting at least ~10% growth year-over-year is a LOSS.

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Danny007
Monday, July 13, 2009 @ 3:37:04 PM
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Totally agree Ben, only time will tell.

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N a S a H
Monday, July 13, 2009 @ 3:37:54 PM
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In times like these, 20% dip in software sales isn't what I was expecting. I don't think this economic crisis has really hit the gaming market as much as it has hit others.

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Milonakis
Monday, July 13, 2009 @ 3:41:45 PM
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I will buy any game that is PS3 exclusive. Especially Katamari forever.

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Kangasfwa
Monday, July 13, 2009 @ 5:42:26 PM

You would even buy Lair?

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LegendaryWolfeh
Monday, July 13, 2009 @ 7:14:06 PM

I've been tempted ;) because I really want to check it out, especially since you can use the sticks and not just the sixaxis.

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Scarecrow
Monday, July 13, 2009 @ 4:07:20 PM
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I can't believe I don't have inFamous yet...

Well but I got the simply STUNNING Killzone 2!
So really eyeing InFamous as my next purchase, no doubt.

The economy's f*cking up the world

One country tanks, all country tanks, we need a better system.

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WorldEndsWithMe
Monday, July 13, 2009 @ 5:39:27 PM

I finally picked up infamous, definitely worth the cashola.

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mexgeo86
Monday, July 13, 2009 @ 4:21:55 PM
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If a price cut is to happen then it will come, but the current and upcoming line of PS3 exclusives is making it possible for SONY to stay somewhat afloat and not have to resort to a cut.

We're past half of '09 and Sony is still here, still selling. No company is truly recession proof (except maybe beer companies, lol), but given how Sony is holding up, it's doing a good job.

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godsman
Monday, July 13, 2009 @ 4:40:17 PM
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It makes no sense that Sony cuts the price by 50 bucks, while they push out all those double game bundles. It has to be 100. 50 dollar price drop impact does nothing. Microsoft will definitely cut their price after Sony's surge.

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WorldEndsWithMe
Monday, July 13, 2009 @ 5:41:35 PM
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Exclusive > multiplat.

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Scarecrow
Monday, July 13, 2009 @ 7:12:03 PM

It's ALWAYS been that way

With some Capcom exceptions

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kevinater321
Monday, July 13, 2009 @ 7:24:28 PM

Ya I actually don't know why that is :s. Mutli plats can be good but for some reason they are never as good as exclusives. I have 6 exclusives and 4 multis and there is no doubt that I play my exclsives 50 percent more often.

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Hezzron
Monday, July 13, 2009 @ 9:17:13 PM
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Price cuts are always welcome, but at some point you just have to buy and join in on the fun. I wonder if there are any gamers still holding out for a PS2 price cut. Ha!

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LimitedVertigo
Monday, July 13, 2009 @ 9:27:50 PM
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The same analysts also mentioned that Prototype is expected to outsell Infamous by 90% cross platform. hmmmm

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Scarecrow
Monday, July 13, 2009 @ 9:43:20 PM

Getting paid by Microsoft or have connections to them in one way or another?

Probably

The American media as a whole is being managed in such a way as to allow Microsoft to get away with everything.

Why don't they go in the air and present the astrocious RROD failures(with numbers). Along with the fact that the console's games are being pirated to death, etc. etc.

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LimitedVertigo
Monday, July 13, 2009 @ 9:52:57 PM

Wow...Scarecrow I own a Ps1, 2 PS2's, a PSP, and a PS3.

All I did was offer the complete estimates offered in the article. Ease up, it's just videogames...

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Alienange
Monday, July 13, 2009 @ 9:53:56 PM
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You can price cut the Wii all you want, it's still a Wii.

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LimitedVertigo
Monday, July 13, 2009 @ 9:58:36 PM

I don't really get why they would, seems every I know has one or wants one. I freaking hate the wii. Well except when I'm drunk and everyone want's to play it.

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___________
Tuesday, July 14, 2009 @ 4:46:51 AM
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software sales will be up from last year.
because theres alot more series sequals comming this year compare to last.
hardware will be a different story though, and i seriously cant see nintendo droping the price of the wii.
4 of my local EB stores are sold out for how many months in a row, i cant believe how popular those things are.
as for M$ 299 AUD that says it all how can it get cheaper than that, seriously if ps3s followed that suit there would be 10 in every house hold.

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TEG3SH
Tuesday, July 14, 2009 @ 6:40:52 AM
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cashola .lol good infamous reference ;)
for me infamous was soooooo much better as a game than prototype will ever be. but when u're drunk nothing beats prototype {again alcohol makes everything better ;) }

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LimitedVertigo
Tuesday, July 14, 2009 @ 10:52:57 AM

except butt sex

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Robochic
Tuesday, July 14, 2009 @ 10:20:28 AM
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Agree time will tell...

Lair BTW was a good game a little frustrating at times but great use of the sixasis.

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SkantDragon
Tuesday, July 14, 2009 @ 4:45:46 PM
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I don't know about the other guy, but I've been paying attention to Pachter's predictions for some time now. And as far as I've seen, they're consistently wrong.

I think news sources shouldn't publish what any analyst has to say without also mentioning their track record.

'Analyst X predicted that Y would happen. Analyst X has been right about 2 of his last 15 predictions.'

Pachter, for instance, has been predicting that Sony was just about to make a price cut for something like a year now, and I'm beginning to wonder if Sony holds off on it just to spite his continual predictions about it.

It's the most amazing to me when anyone publishes anything Robert Enderle has to say. Everything he says is an agenda item and is proven wrong nearly 100% of the time. Yet news sources love to quote him all the time.

Yet there seems to be little interest in quoting someone like Bill Hunt who's industry predictions seem to approach 100% accuracy.

Last edited by SkantDragon on 7/14/2009 4:48:15 PM

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TEG3SH
Wednesday, July 15, 2009 @ 7:35:10 AM
Reply

thats nasty mate .lol

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