US 360 price cuts likely to follow Japan's

via Computer and Video Games


More aggressive US Xbox 360 pricing now probable, says analyst Colin Sebastian, while Wedbush Morgan's Michael Pachter agrees cuts might be needed to combat "stagnant demand".

Lazard Capital Markets analyst Colin Sebastian believes Microsoft is likely to cut the prices of its three Xbox 360 models in the US following the company's decision to do so in Japan from September 11.

"We believe the Japan announcement is a likely precursor to more aggressive pricing of the Xbox 360 in the US, and we continue to expect a lower $199 price point on the base Arcade sku (below the $249 Wii price point), as well as lower $299 and $399 prices for the 60GB and 120GB versions, respectively," Sebastian wrote in an investor note Tuesday.

In a separate note Wedbush Morgan analyst Michael Pachter also acknowledged the possibility of pre-holiday Xbox 360 price cuts in North America.

"Due to the relatively stagnant demand for Xbox 360, we may see additional price cuts for this system before the holidays (we note recent speculation of Xbox 360 price cuts on September 7, with the Arcade going to $199 from $279, the Pro going to $299 from $349, and the Elite going to $399 from $449," he wrote.

Sebastian also predicted a drop in hardware sales during August as "supplies remain spotty".

"Our checks through late August/early September indicate console hardware supplies are spotty, with Nintendo's Wii in strong demand, and the transition of the PS3 to a new 80GB sku creating some lag in supply. As previously discussed, we expect August NPD data to reflect lower hardware unit sales with Nintendo likely stocking units ahead of the holidays, Microsoft phasing out of the 20GB Xbox360, and the PS3 unit transition."