14 DAY TRIAL // In his pre-NPD May data forecast, Wedbush Morgan analyst Michael Pachter predicted that Sony's PS3 would be outsold by Nintendo's Wii by a margin of 4 to 1. The man also forecasts software sales for the company of some $333 million. However, no one seems to be looking into the fact that the PS3 costs more than double compared to the Wii. That makes it less than 2:1 if I'm not mistaken.
Not that I'm telling analysts how to do their job or anything, but really now, the PS3 isn't exactly a failure. Yeah sure, it sports quite a limited amount of titles, it hasn't exactly reached parents' hearts either, like the Wii did, plus it had the worst start ever, but the damned thing costs $600 for crying out loud. The Wii currently retails for $250 (if not less) and giants such as Sony, Microsoft and Nintendo worry about the net profits and losses first, not about fame. But yes, speaking of number of consoles sold, Pachter's predictions were - and still are - accurate. He's one of the best you know.
Pachter also hinted in his last forecast that hardware pricing was set to continue impeding sales figures and that cuts may be implemented later in the year, stimulating the market, as NextGeneration reports. "Now that supply and demand of the PS3 and Wii are near balance," he said, "we think that hardware unit sales will be more modest than they were in the analogous period of 2002, when console prices averaged under $200."
Pachter continues with his predictions commenting on their expectations of "higher average console prices to be an impediment to rapid sell-through of hardware, and we expect cycle-to-cycle declines of 10% or more for hardware sales to persist through the end of summer 2007. It is possible that Sony's cost of production for the PS3 has declined to the point that the company may consider a hardware price cut some time this summer, and we may see a price cut for the PS2 and Xbox 360 before the holidays. Each of these could serve as a catalyst for sales growth later in the year."
But Microsoft hammered down rumors of a price cut for their next-gen system, making it sound like the console was never going to see a reduction in price. Sony didn't announce intentions for a price cut in their line of systems either, so who are we to believe. I'd go with the analyst's opinion on this one, even though I always said we don't really need an expert's opinion for these things, if we bother to look at the facts and compare them a bit.
Pachter concludes, saying that they expect "major share price appreciation for the major video game publishers by the end of the year as the next generation console cycle is in full swing, and recommend that investors accumulate Activision, Electronic Arts, GameStop, THQ, and Ubisoft shares at current levels," Pachter concluded. So I guess it'll be a full year of nothing but Guitar Hero, FIFA, S.T.A.L.K.E.R. and Splinter Cell titles huh? Kidding of course, but let's hope those price cut predictions prove to be accurate.