Pachter: Console Prices Will Drop, PS3 First To Fall

The PlayStation 3 started at $600 when it launched in 2006 and it now sits at half that price.

For a while, analysts said $300 would be the sweet spot for both the PS3 and Xbox 360 and indeed, both consoles have fared well enough at that price. But the flat 2010 has led Wedbush Securities analyst Michael Pachter to predict that console prices will fall again in 2011. Despite substantial growth in the user bases of both the PS3 and 360, console sales fell 5% in 2010 (although we also imagine the falling Wii popularity contributed to that 5% drop). And so, in speaking to Industry Gamers, Pachter said he expects all systems to drop in price during the year, and the first will be the PS3:

"We fully expect each of the three consoles to be offered at lower prices in 2011, with Sony likely leading the way as its manufacturing costs continue to decline. A $50 price cut should be sufficient to drive 5% software sales growth; and, coupled with a resurgence in handheld software sales and an easy comparison for music sales, we think that overall software sales growth could hit low double digits in 2011."

So maybe we'll see the PS3 drop to $250 at some point, which of course would make it an even better deal. The user base continues to rise and several analysts have predicted that Sony's machine will pass the 360 in worldwide sales this year. Well, we'll have to wait and see.

Tags: ps3, playstation 3, pachter, ps3 price

1/14/2011 12:22:36 PM Ben Dutka

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Comments (64 posts)

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Imagi
Friday, January 14, 2011 @ 12:31:44 PM
Reply

Hot off the press!!! Pachter states the obvious!

17 up, 1 down

maxpontiac
Friday, January 14, 2011 @ 12:48:33 PM

Truth. I want to know how he got his job.

0 up, 1 down

sawao_yamanaka
Friday, January 14, 2011 @ 12:51:10 PM

By being better than the other obvious staters! Lol I want his job as well.

1 up, 1 down

Highlander
Friday, January 14, 2011 @ 4:05:59 PM

In truth, the man reads my posts here and then issues a strategic analysis a week later that repeats them...either that, or maybe *I* am the Pachter.

;)

8 up, 1 down

Highlander
Friday, January 14, 2011 @ 4:14:37 PM

Should have added...

MWHA HA Ha ha ha ha ha ha ha haaaaa!!!!

3 up, 1 down

Temjin001
Saturday, January 15, 2011 @ 12:13:34 AM

casts lvl 5 death on evil pachter =p

0 up, 0 down

Highlander
Saturday, January 15, 2011 @ 1:39:52 AM

Uses the Amulet of Dispossession to free himself of the influence of The Pachter.

0 up, 1 down

A2K78
Friday, January 14, 2011 @ 1:09:13 PM
Reply

Why I don't foresee a price drop anytimes for the PS3...a strong yen. To put it straight, at this point Sony can't afford to the drop price of the PS3 any further without it severly impacting profits due to the way the yen is trading.

Its not just Sony this is affecting, but Nintendo also. If Nintendo were drop the price of the Wii it would also impact thier profits also due to the strong yen.

7 up, 2 down

WorldEndsWithMe
Friday, January 14, 2011 @ 2:24:31 PM

Pachter doesn't understand currency, which is why he's always wrong.

6 up, 1 down

akmdpc
Friday, January 14, 2011 @ 4:17:35 PM

I'm hoping for the new PS3 Slim S model. Smaller CPU process and PS2 backward compatible.

1 up, 0 down

mexgeo86
Friday, January 14, 2011 @ 1:13:01 PM
Reply

I think $300 is a great price for what you get. Given the 2011 lineup of games I don't think that a price cut is needed at the moment, maybe holidays but not now.

5 up, 0 down

Fane1024
Saturday, January 15, 2011 @ 4:37:48 PM

The only thing wrong with the 300 price is that it isn't less expensive than sending your system to Sony for repairs.

M$ have had a $200 replacement system for years and that has driven a lot of hardware sales.

At $250 (or thereabouts), it makes more sense to get a new system (and DS3) than to get your system repaired.

Last edited by Fane1024 on 1/15/2011 4:38:17 PM

0 up, 0 down

Highlander
Saturday, January 15, 2011 @ 5:09:51 PM

Fane,

What you just described is a perfect description of why PS3 software sales grew last year and 360 software sales did not.Many sales of the 360 at $199.99 are replacement units, as you say, it's often more or less as cheap and a lot more convenient for people to replace their dead or dying unit with a base model.

The PS3 suffers a far lower mortality rate anyway, and with the price not being a convenient replacement price, more people use the repair services, which means that a higher % of PS3 sales are new owners who buy games, so the PS3 base is growing faster than the 360 base. This is confirmed further by the numbers of subscribers to XBL and PSN. Not much more than a year ago they were roughly the same. Now there are more than 10 million moe PSN subscribers than XBL subscribers. Some of those are surely multiple accounts for one system, on both platforms. Still, it makes some interesting food for thought, doesn't it?

0 up, 0 down

slugga_status
Friday, January 14, 2011 @ 1:13:10 PM
Reply

So basically he's saying the PS3 will bring in Nintendo lost revenue..as if we that wasn't apparent especially with Move available...smh

0 up, 0 down

Gamer Girl Gemo
Friday, January 14, 2011 @ 1:13:22 PM
Reply

That sounds nice. For some reason, $250 seems a lot less daunting than the full $300. Besides, I'm expecting a new PS3 could possibly be in my future this year... My fatty has been freezing more lately.

Last edited by Gamer Girl Gemo on 1/14/2011 1:13:59 PM

1 up, 0 down

Alienange
Friday, January 14, 2011 @ 1:25:36 PM
Reply

Forget the number of consoles out there, what the heck is up with PS3 owners not buying games?? 45 million consoles and not a game has sold over 10 mil?

8 up, 0 down

Jawknee
Friday, January 14, 2011 @ 1:35:31 PM

Did you miss the article that stated the PS3 saw a 32% increase in software sales?

I used to think PS3 owners weren't buying games either but JohnLD made the point the PS3 library is more diverse than the 360 library. Simply put, people have more games to choose from in regards to the PS3 while 360 people have Halo and Gears.

Last edited by Jawknee on 1/14/2011 1:38:46 PM

11 up, 0 down

Rogueagent01
Friday, January 14, 2011 @ 1:55:50 PM

@Alienange

I do think several games have sold over 10 million the only thing is that they aren't brand new copies. I have a couple little shops around here that sell just as many games as the local Gamestops however the majority of their sales are used games, and they don't get reported. Also the Xbox has those sales because of the unfortunate fact that more kids own Xbox's whereas more adults are known to own PS3's. Kids hound their parents and the parents buy whatever $60 game they want just to shut them up where as adult PS3 owners are wiser shoppers and will look for deals whenever they can get them. Granted everything I am saying here is opinion but I believe there is some truth to it.

2 up, 0 down

Norrin Radd
Friday, January 14, 2011 @ 3:24:34 PM

@Rogueagent01

I think there's probably some truth to what you are guessing. I'm an older gamer. Bought my PS3 this summer and have a library of 14 games. Only 2 were bought at $60 - and even then that was at TRU on a buy 2 get one free sale - that' averages to $40 for those 3 games. The rest of the games I have bought heavily discounted, either used or older (I got AA for $20 for example). 7 were straight up used for $17.99 or less. You can buy a lot of game for cheap if you are patient........

Last edited by Norrin Radd on 1/14/2011 3:28:28 PM

4 up, 0 down

Karosso
Friday, January 14, 2011 @ 3:32:19 PM

I have a feeling Uncharted 3 will change that :)

3 up, 0 down

Alienange
Friday, January 14, 2011 @ 4:43:00 PM

You know Rogueagent01, that's a really sad story you're telling there. It's most likely true too, which makes it doubly painful.

I like your explanation Jawknee. You know what though? I think, despite what I wrote, that times are changing. That great and greater game sales will hit the PS3. I mean you see what the 360 has lined up for 2011?

Yeah... not much.

2 up, 0 down

MyWorstNightmar
Friday, January 14, 2011 @ 7:14:38 PM

While I buy the diversity of game selection explanation to a point, that doesn't explain why (as an example) Uncharted 2 hasn't sold north of 10 million. Maybe not 45 million copies sold, but 10 million sounds about right for arguably the best video game ever made IMO. If 45 million people didn’t buy the worlds greatest gaming console to play a masterpiece like Uncharted 2, then what did they buy it for?

Perhaps Folding@home is a bigger reason to buy the PS3 than I thought. ;)

2 up, 1 down

Highlander
Friday, January 14, 2011 @ 9:25:08 PM

Alienage,

There are 140 million PS2s , how many PS2 games sold 10 million copies? Go look it up. I'll wait. Tell you what, I'll give you to the count of three...Oh, alright, I'll tell you. Three.

(Oh I hate using Wikipedia, but I'll do it this once...)
1. Grand Theft Auto: San Andreas (17.33 million approximately)
2. Gran Turismo 3: A-Spec (14.89 million approximately: 7.14 million in North America, 1.89 million in Japan, 5.85 in Europe)
3. Gran Turismo 4 (10.76 million approximately: 2.97 million in North America, 6.36 in Europe, 1.26 in Japan)

2 up, 0 down

Highlander
Friday, January 14, 2011 @ 9:39:54 PM

@RogueAgent

Don't forget the BluRay discs that PS3 games come on are nearly indestructible. Buying a used copy is often as good as buying new. Unlike the 360 where the machines scratching discs is a common, and known issue, and the DVDs scratch easily anyway making used games far, far less attractive.

3 up, 0 down

Temjin001
Friday, January 14, 2011 @ 9:48:27 PM

Highlander, it's okay to use Wikipedia. Just check the sources that they have for citation. Gran Turismo, for example, is cited straight from Polyphony of Japan's website. And FF7 is sourced straight from Square-Enix.

So don't be ashamed =)

0 up, 0 down

Alienange
Saturday, January 15, 2011 @ 8:02:55 PM

@ TheHighlander - It's a shame you were in such a hurry to put a fellow commenter down that you not only got your facts wrong, but completely missed the point.

0 up, 1 down

Highlander
Saturday, January 15, 2011 @ 9:36:48 PM

Your point was to say that 45 million consumers should produce 10 million selling games, I pointed out that a console with 140 million consumers never produced more than three games selling more than 10 million copies. How does that miss the point? You're expecting 45 million potential consumers to purchase more games than over 100 million consumers did. How did I miss the point exactly? And if you have an argument with the information I quoted from Wikipedia, rather than simply assert it's false, post your reasons for saying their false. In other words, post proof or retract. I'm more than happy to accept that there are other games that broke 10 million copies sold on the PS2, but you'll have to provide some evidence to show it.

BTW, I didn't put you down. On the other hand claiming that the information I posted is wrong/false without any shred of evidence to back up your assertion comes a lot closer to putting another commentator down.

Last edited by Highlander on 1/15/2011 9:38:17 PM

2 up, 0 down

WorldEndsWithMe
Friday, January 14, 2011 @ 2:27:32 PM
Reply

I really don't think the PS3 price will drop this year. It's mildly possible this Christmas, but I don't think so. They won't make enough money to support the launch of the PSP2 around that same time. Pac attack is probably off on this one.

2 up, 0 down

Highlander
Friday, January 14, 2011 @ 4:13:27 PM

I think it's possible that they might do a $50 cut in the autumn in time for the Holiday rush. But, if they do that, it will be the final reduction for this form factor. I personally think that there will be a new super slim PS3 in about 2½ years time. If I were Sony, I would prefer to reserve the cut to $250 for that model revision. However, with the reduction in the cost of BluRay, the chipset and other components, a $50 cut might be possible later this year, with a final $50 reduction in line with the eventual 'super slim' model in 2½ years or so.

1 up, 0 down

Jawknee
Friday, January 14, 2011 @ 4:44:16 PM

You think they'll really be able to slim the console down even more? The current Slim models still feel pretty heavy.

0 up, 0 down

Highlander
Friday, January 14, 2011 @ 5:00:14 PM

Yep. If you take the CPU/GPU and shrink them to 32 or 22nm and even put them on a single die, you can use a much smaller heatsink and power supply. Everything else will be able to be more integrated by then, and BluRay drives should still be dropping to commodity pricing. The high cost items in the PS3 now are the CPU/GPU, BluRay and HDD. If you're targetting a $250 price point, you have to figure about $50 for a HDD (OK maybe a little less, but go with it), leaving $200 for the rest. If factory prices for the bare BluRay drive is below $50, that leaves $150 for the rest including assembly. A more integrated chipset and a single die CPU/GPU will simplify motherboard design and assembly. I think $250 is doable, especially if they shrink the Cell and RSX and put them on the same piece of silicon. If they squeeze the costs enough I could make a case for a $200 price eventually, but that might be a little premature.

1 up, 0 down

Qubex
Friday, January 14, 2011 @ 10:08:57 PM

I'm with you on that one world!

Q!

"play.experience.enjoy"

0 up, 0 down

Fane1024
Saturday, January 15, 2011 @ 4:43:37 PM

Hopefully, there's enough money left for at least four USB ports (2 in front, 2 in back).

I would really like a PS3 that runs cooler and more efficiently, but I'd lose too many features from my 60 gigger and the four USB ports is actually one of the things I'd miss most.

Last edited by Fane1024 on 1/15/2011 4:46:00 PM

0 up, 0 down

Highlander
Saturday, January 15, 2011 @ 5:13:04 PM

*If* Sony release a new PS3 with more USB ports, memory card reader and PS2 compatibility but a much cooler running system at $300-$350 while the regular units were $250-$300, I'd leap at the chance, as would a lot of gamers I think.

Good grief, the PS2 is a system on a chip now, it should be easy to put into a PS3. For that matter, if they SP2 is a system on a chip, and can be shrunk and given a low power treatment, it should be possible to include on on a potential PSP2 as well.

2 up, 0 down

A2K78
Friday, January 14, 2011 @ 2:49:01 PM
Reply

"Pachter doesn't understand currency, which is why he's always wrong."

I'm quite sure Patcher knows more about currency(and and forecasting) and economics than most gamers out there who's always judging.

In the case of Patcher, he's mainly forcasting based on the current NPD report which showed a slump in console sales. To futher add, I'm sure as a statician analyst Patcher doesn't see his forecast as being abosolute.

Overall even though I tend disagree with some of the forecast he have made, I greatly respect him for the asset he have been to the industry when it come analytics.

0 up, 7 down

Jawknee
Friday, January 14, 2011 @ 3:00:03 PM

Still haven't figured out how to use that reply button eh economic and currency genius?

8 up, 0 down

WorldEndsWithMe
Friday, January 14, 2011 @ 3:22:42 PM

You made my point for me. If you only take into account the NPD in predicting a price drop for a worldwide console then you've done about a third of your job. You have to take into account the other regions and their currencies as well.

In short, North American trends based on a very weak dollar don't translate to a console price drop. Pachter has been wrong on this before.

8 up, 0 down

Highlander
Friday, January 14, 2011 @ 4:08:19 PM

As Worlds very expertly points out, you shot down your own assertion.

5 up, 0 down

CH1N00K
Friday, January 14, 2011 @ 4:04:29 PM
Reply

Leave the price alone I say...It's a great system for a good price, but bring back 4 USB ports and SD card reader..throw in B/C and slap in a 500+ GB hdd...

I already had to swap out my 120GB Slim for a 500gb, and that's money for an HDD that went to someone else besides Sony.

Instead of lowering the price, increase the value...

Last edited by CH1N00K on 1/14/2011 4:05:46 PM

2 up, 0 down

Highlander
Friday, January 14, 2011 @ 4:07:07 PM

Two SKUs. One at $250 with the current unit and HDD, one at $300 with the extras. Been saying this since day 1, still waiting for Sony to catch a clue.

6 up, 0 down

Deleted User
Friday, January 14, 2011 @ 4:56:03 PM

I really think they need a $199 SKU for the casuals with a 20 GB HD. People can still replace the HD with something beefier if they wish. Seems like many Americans don't realize how little they get for their $199 when they buy the competition.

5 up, 0 down

NoOneSpecial
Friday, January 14, 2011 @ 4:57:41 PM

True that. I bet the only thing keeping the mainstream public from buying a PS3 instead of the XBox is that there is a cheaper version of the XBox available for $250. If Sony was to reduce the price of the 160GB to $250, more people would do their research and figure out the PS3 really is the better deal. I'm pretty sure that Sony would gain a lot out of this.

0 up, 0 down

Highlander
Friday, January 14, 2011 @ 5:01:58 PM

@brighat,

The thing is that the $$ difference between a small GB and 500GB drive is less than $20. There's no way to cover the gap of $100 to give a $199 model right now.

@No one special,

Those $250 360s, aren't they simply old stock being sold off so that the new $300 squats rule the shelf in future?

Last edited by Highlander on 1/14/2011 5:02:54 PM

3 up, 0 down

Deleted User
Friday, January 14, 2011 @ 5:52:52 PM

@TheHighlander

I see.

I kind of wonder why MS can't put more than a 4 GB HD in their $199 model if that's the case.

0 up, 0 down

StangMan80
Friday, January 14, 2011 @ 6:44:38 PM

I think BC will get a lot of people to finally get a PS3. I agree with you guys, a cheaper system(small HDD, same console as of now) and have a system that has BC, more features and more space.

The 360 has a system for sale that doesn't even have a hard drive and comes with a wired controller. People even buy that. Sony catch on, give us what we want and get more PS3 in our homes.

1 up, 0 down

NoOneSpecial
Friday, January 14, 2011 @ 8:39:45 PM

@The Highlander You're right. Please excuse my mistake :D

0 up, 0 down

Highlander
Friday, January 14, 2011 @ 9:41:55 PM

@SomeOne

Well, if they are still selling off their old stock of 360s, isn't that really a testament to the sheer number of old model 360s that they had stuffed the channel with under the guise of models shipped? Gotta wonder when they might finally run out of those older, more disaster prone, systems.

2 up, 0 down

WorldEndsWithMe
Friday, January 14, 2011 @ 5:36:38 PM
Reply

Looks like Sony is adding a rather large market next: CHINA

http://www.psu.com/PlayStation-coming-soon-to-China--a010422-p0.php

Last edited by WorldEndsWithMe on 1/14/2011 5:36:59 PM

1 up, 0 down

JSwayze
Friday, January 14, 2011 @ 5:50:53 PM
Reply

If the price drop I might consider picking up a 3rd PS3

3 up, 0 down

Robochic
Friday, January 14, 2011 @ 5:56:33 PM
Reply

I think a price drop is not going to happen as of right now it's still flying off the shelves @ the 300 price point, but if it happens then cool if not i'm not going to cry over it.

I'm still waiting for them to drop the price here in Canada for repairs I would like to get my fat princess fixed :) thats what I would love to see.

1 up, 0 down

StangMan80
Friday, January 14, 2011 @ 6:39:28 PM

I don't see the price tag for Sony's machine to drop until around late October through November.

The PS3 is doing good at $300.

A price drop and Sony's list of games will give anybody no reason to not own a PS3 and any gamer who has both or either of the 360 and Wii will get one. Then they all will go, "Dang, we been missing out on all this."

1 up, 0 down

Highlander
Saturday, January 15, 2011 @ 1:46:24 AM

Yes, but, what is the reason for not owning one now? Free online, the list of games you mentioned, BluRay, Netflix, online, Internet, upscaled DVD, HD, 3D, Move, motion controllers (Sixaxis), Bluetooth headsets, keyboards and other accessories.

What more reason does anyone need? Seriously, OK, a 360 is a decent game console, but it lacks true 3D, BluRay, Bluetooth (unless they finally threw that into the squat), you have to pay to play. Never mind the epic failure rate that the 360 has endured, cooling fans that sound like a turbo-prop aircraft trying to land and the constant scratched disc problems that users endure.

Anyone still aggressively unconvinced is simply being willfully illogical and contrary.

Last edited by Highlander on 1/15/2011 1:47:14 AM

4 up, 0 down

Bjorn77
Sunday, January 16, 2011 @ 7:36:42 AM

Most people in USA and Europe buy a 360 because their friends own one. One other reason is that you can buy a 360 with a big hard drive and modified to play copied games.

That for a lot of people is enough reason to buy a 360 over a PS3.

1 up, 0 down

StangMan80
Friday, January 14, 2011 @ 6:34:20 PM
Reply

I thought it was worth it when I got my 60gig for $600. $300 is just an amazing deal and $250 price tag for what this machine can do leaves you no reason to not own one. With a price $250 price and after I get a new TV. I'll be getting me another one, one for the bedroom and one for the living room.

I don't really care about the hole sales gap between the PS3 and 360, But if this happens the PS3 will have that gap closed and passed in no time.

The 360 and Wii are done with in my book, the PS3 still has so much life.

3 up, 0 down

FM23
Saturday, January 15, 2011 @ 2:30:59 AM
Reply

I paid $400 for a 40GB PS3. If anyone is complaining $300 for a 160GB is expensive, then they are either cheap or just want a PS3 just to have a PS3. $50 isn't that much money and if anyone can't random save $5 for 10weeks to make up the rest of that $300...then you need a new job...lmao

0 up, 0 down

___________
Saturday, January 15, 2011 @ 2:46:18 AM
Reply

thank you for the update pachter, in other breaking news clouds are white, water is wet and if you jump into a blazing fire you will get burned.
the ps3 will eventually get a price drop, but i doubt it will be anytime soon.
you got to remember sonys loosing quite a bit still on every system they sell, not to mention the jailbreak debacle and all the court costs there going to want to make as much off every system they can!
sure a price drop would increase sales, but i doubt it would increase them enough to offset the price drop.

1 up, 1 down

tes37
Saturday, January 15, 2011 @ 9:48:21 AM

In June of last year, it was reported that Sony began to see a profit on ps3's. PSXExtreme had an article on it written by John Shepard.

3 up, 0 down

GuyverLT
Saturday, January 15, 2011 @ 11:29:22 AM
Reply

I just want my backward compatibility back. I've been waiting for the longest DAMMIT SONY why o why would you take such a precious feature out????? Someone please explain!!!!!

3 up, 0 down

Fane1024
Saturday, January 15, 2011 @ 4:51:24 PM

It was horrendously expensive to include the hardware in every system and almost no one used it.

0 up, 0 down

GuyverLT
Saturday, January 15, 2011 @ 8:39:57 PM

well hell give all the PS2one & s games hd remakes or make them DLC at least.

0 up, 0 down

Highlander
Saturday, January 15, 2011 @ 9:40:55 PM

Sony's already done quite a large number of game remakes in HD, so they are doing that. And it has to be pointed out that if it was possible to simply include software emulation of the PS2, they would do that instead of spending money to re-make PS2 games.

1 up, 0 down

BikerSaint
Monday, January 17, 2011 @ 4:05:43 PM

A lot of gamers used the PS2 BC.
Haven't you noticed all the complaints to bring it back,every since they first took it out?????

1 up, 0 down

RebelJD
Saturday, January 15, 2011 @ 5:54:20 PM
Reply

A PS3 price drop to start off the Summer would be sweet! Or, a price drop near or shortly after the Nintendo 3DS would be genius!

Press releases are the best way to stir up interest and take away shine from the competition.

Best cross-press releases for Sony/Playstation? The announcement of the PSP2 and Playstation Phone. The production stop of the PS2 hardware and the firmware update to the PS3 to become PS2 enabled. The release of AAA Playstion Move titles with the announcement of a new Playstation Eye release with enhanced specs/features. All this in 2011 would be gem.

0 up, 0 down

Highlander
Saturday, January 15, 2011 @ 9:44:38 PM

PS2 compatibility will most likely not be enabled in a firmware update, full emulation of a PS2 in software is very difficult because of the Graphics Synthesizer GPU in the PS2. It used extremely wide data buses which transfer a truly huge amount of data per second. It's unlikely anything will emulate a PS2 in software without a hardware assist of some kind.

0 up, 0 down

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Pachter: Console Prices Will Drop, PS3 First To Fall

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