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Retail

Price cuts may not stimulate sales - analyst

Thu 13 Aug 2009 12:27pm GMT / 8:27am EDT / 5:27am PDT
BusinessRetail

September cut for Wii, PS3 and 360 Elite, says Creutz

An expected round of price cuts for all home consoles may not be enough to stimulate sales of hardware and software in the US.

That's according to Doug Creutz of Cowan and Company, who has warned that the consumer is already suffering from economic pressures, suggesting discounts may not be as effective in boosting the market as they have historically.

"We are concerned that, given pressures on the consumer, price cuts may not have the stimulative impact to hardware and software sales that they have had in the past," wrote Creutz in his latest note to investors.

He said that all three home consoles will benefit from a price cut, suggesting a USD 100 reduction on the PlayStation 3, USD 50 off Nintendo's Wii, and the price of the Xbox 360 Elite dropping to USD 300.

"We expect hardware price cuts on all platforms by September, with announcements possibly as early as next week’s Gamescom."

NPD data released tonight will reveal sales of videogame product in the US for July, with Creutz expecting a software sales decline of 23 per cent compared to the same period last year.

The firm also estimates August sales of console and hardware to fall in the mid-teens, but year-on-year comparisons to improve for September with the release of Halo: ODST, The Beatles: Rock Band, Marvel Ultimate Alliance 2 and Guitar Hero 5.

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