Analyst Predicts Xbox 360 Price Cut Announcement

Perhaps in response to Sony dropping the price of the PlayStation 3, Wedbush Morgan Securities analyst Michael Pachter said to investors on Monday that he believes that Microsoft will answer with price cuts to all Xbox 360 models, reports Next-Gen.

“The value proposition for the PS3 is increased at the new lower price point, putting increased pressure on Microsoft to cut the price of its Xbox 360. The 80GB and 60GB PS3 models compare favorably to the 120GB and 20GB Xbox 360 models,” said Pachter. “We think that the $499 PS3 compares quite favorably with the $399 Pro 360 model, which has only a 20GB hard drive and no HDMI output.”

“Because of this favorable comparison, we believe that Microsoft is all but compelled to cut prices, and we think the price cuts will come no later than at Microsoft’s Tuesday night press conference,” added Pachter.

Pachter predicts that the $299 Core system will drop to $249, the $399 Premium down to $349, and the $479 Elite will get the biggest cut of all to $399.

The analyst also brought up Microsoft’s slight shortfall in its goal to ship 12 million Xbox 360 consoles to retailers by June 30 – a target missed by 400,000 units. Pachter said, “Last week, Microsoft announced a slight Xbox 360 shipment shortfall (11.6 million units versus prior guidance of 12 million units through June 30), and we do not believe that the company is prepared to allow Sony to erode its pricing advantage.”

The price cuts to the Xbox 360, if true, will help distance the Xbox 360 Elite model from the PlayStation 3. Both consoles feature HDMI output – a big selling feature for those with HDTVs. Currently, the 60GB PlayStation 3 and Xbox 360 share the exact same price point in the Canadian market.

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