Analysts Predict All 3 Major Consoles at 199
Gerard Klauer Mattison analyst Edward Williams believes the gaming industry will see--for the first time--a complete price eclipse between three major competing console makers. Due to sluggish sales in the first half of the year, Microsoft is expected to drop the price of its console to 199. Although Sony´s sales figures are still very good, to stay competitive it is also expected to drop to the 199 dollar price point with its Playstation 2 console. That means all three consoles would not only be the same price, but have every new game title released at the same (50 dollars) price point. Having a standard game price in addition to one price for all consoles in a territory is extremely rare.

In a research note released Monday, Williams predicted an extremely strong likelihood of Microsoft announcing a price cut for its Xbox console in North America from 299 to 199 at its E3 press conference.

"Given a need to increase its installed base and a lack of exclusive key titles to help do so, we expect Microsoft could use this opportunity to pre-empt Sony and take a leadership position in dropping the price of Xbox," said Williams.

But if PS2 sales were still rocking the sales charts, why would Sony want to (once again) operate at a loss by selling its console for 199 dollars? According to Williams, "the recent slowdown in hardware unit momentum, coupled with the competitive threat of Xbox at a lower price, makes a price cut on the PS2 more likely, in our view," Williams said.

Explaining why it isn´t completely necessary Sony caves in, Williams added, "given this enormous market share--and apparent demand for the product--the company does not necessarily need to cut the price of the hardware, especially when you consider that the company has experienced weakness in some of its other businesses--making the profit derived from PlayStation that much more important." Additionally, keeping the price fixed at 299 dollars may help in adding to the PS2´s status symbol, while making the Xbox look like a premature failure.

Their is a consensus brewing that both consoles will see 100 dollar price cuts. This leaves Nintendo in an interesting situation, as GameCube may no longer have a price 2/3 that of the competition as a selling point. The earliest anyone expects Nintendo to lower the price of the GameCube (to 149) is this Fall