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PS3 and Wii price cuts expected - GameStop

And major US retailer doesn't believe digital distribution will hurt retail in short term

Major US retail chain, GameStop, is apparently expecting the prices of the PlayStation 3 and Nintendo Wii to drop in the US later this year.

That's according to an analyst note from Sterne Agee's Arvind Bhatia, citing four key executives from the company during a recent meeting, reports Gamasutra.

In addition, GameStop isn't worried about the threat of digital distribution right now it seems, with the company believing that various issues, including costs, will prevent it from becoming a problem in the short term.

"Management believes that a meaningful PS3 cut is highly likely in the near-term," write Bhatia in an investor note, adding that a USD 100 cut may coincide with the launch of Madden NFL 10 in August.

Meanwhile the retailer apparently claimed to "have conducted the most thorough study to date" on digital distribution, and that a solid market in that area "will not exist until 2014" - although even then it anticipates only a quarter of the population will "have access to the technology required to download full games."

The note also outlined an expectation on the part of consumers that downloadable games would be cheaper - around USD 39, instead of the USD 60 premium boxed price point - "so publishers will be less incentivised than some in the industry think."

GameStop closed up 0.7 per cent on Friday at USD 22.95.