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  1. #1
    Wasted Talent Casper's Avatar
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    Default Video Game Industry Asks: Are price cuts coming?

    Video game industry executives who had expected another volley in the price war over game consoles this spring are increasingly wondering if an uneasy truce has broken out instead.

    That would be bad news for game software makers, many of whom are banking on the three game console manufacturers to cut their prices by $50 this May in a move expected to spur demand.

    But cautious comments this week by the head of a major publisher have industry executives asking the question: what happens if game hardware does not get any cheaper?

    Nearly every major game publisher, and most industry analysts, were on record before this week assuming that Sony Corp. 6758.T , Microsoft Corp. MSFT.O and Nintendo Co. Ltd. 7974.OS would cut the prices of the PlayStation 2, Xbox and GameCube, respectively, at the E3 industry trade show in May.

    That's what happened last year, when in the space of less than a week before the show Sony and Microsoft went from $299 to $199 and Nintendo went from $199 to $149.

    But Bobby Kotick, chief executive of Activision Inc. ATVI.O , one of the top three game publishers by revenue, fell out of step with his industry brethren on Tuesday when he said there was every indication Sony was not cutting price.

    "All the indications that we have from the folks at Sony are that they don't feel the need," Kotick said at a Bear Stearns investment conference in Florida, referring to an event for partners and retailers that Sony held last week.

    Sony essentially echoed that view. "We laid out a very top-line view of what our projections are this year," Molly Smith, a spokeswoman for Sony Computer Entertainment of America, told Reuters in reference to last week's Destination PlayStation partner event. "We stand at $199 right now and we haven't discussed or announced any plans to make any adjustments."

    SONY IN DRIVER'S SEAT

    Of the three console makers, Sony, which has a dominant position in the international marketplace, is the only one not offering some kind of discount now.

    Microsoft is giving away two Sega Corp. 7964.T games with the Xbox, and Nintendo is giving away a free game with the GameCube and selling a separate discounted bundle that includes the game "Super Mario Sunshine."

    "Price hasn't seemed to have been a terrible barrier to entry for our customer base," Sony's Smith said.

    Sony led the way last year with its price cut, followed two days later by Microsoft and five days after that by Nintendo, though Microsoft later claimed its price cut had been long in the works and the Sony cut was in response to its plans.

    "I think the price drops to $179 because I think the cost of production right now is $170," Wedbush Morgan analyst Michael Pachter told Reuters. "I think if the console doesn't move at that price and hit Sony's target the next move is to bundle software."

    Nintendo is also on record as saying it sees no immediate need to cut the price of their console this year.

    "We believe at $149 with a free game ... that selling GameCube hardware at $149 presents all the value the consumer needs," George Harrison, senior vice president of marketing for Nintendo of America, told Reuters recently.

    For the time being, Microsoft is also firm on its Xbox pricing.

    "We have not announced a price cut and we have no plans to do that," an Xbox spokeswoman told Reuters.

    Kotick's comments about PS2 pricing came just hours after Warren Jenson, chief financial officer of industry leader Electronic Arts Inc. ERTS.O , said at the same conference that EA assumed price cuts were still coming in May.

    On Wednesday, EA executives said they still expect Sony to sell 9 million to 10 million PS2s this year, with some of that pushed by sales of hit games but the rest from whatever methods Sony sees fit.

    "Whether they do the rest with pricing, promotions, or great advertising is really their choice, but we're confident they can do it," EA President John Riccitiello said in a statement.

    Brian Farrell, the chief executive of game publisher THQ Inc. THQI.O , told Reuters he still believes Sony will cut their price this year but also said that in the end it does not matter if sales stay strong.

    "Any publisher should only care about the number of units Sony's going to sell," Farrell said. "We don't care if they sell their 10 million units at $199, $149 or $99 -- we're indifferent. The price point is not the issue, it's the 10 million units."

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    Registered User XBOX MSSC's Avatar
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    On Wednesday, EA executives said they still expect Sony to sell 9 million to 10 million PS2s this year.
    i wonder why that is? a-holes....


    BTW good find casper.
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    Wasted Talent Casper's Avatar
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    Originally posted by XBOX MSSC
    i wonder why that is? a-holes....


    BTW good find casper.
    Thanks stranger

    Man, I figured this would get some kind of interest, I snagged it from a Reuter's news press...oh well, maybe later

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    i could really care less how many ps2's are sold. I'll stick with my xbox for the forseable future mainly because i dont have time for 2 or more consoles or the desire to have more than 1. =)

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    I want to eat your brain VenoM's Avatar
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    really wish they would cut the price of games...50 bucks for a new game is just to much......i bet if games were less about 20-30 piracy would be very low....they seem not to understand some of the reason for piracy is cause software/game companies over charge people...greedy bastages

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    Originally posted by VenoM
    really wish they would cut the price of games...50 bucks for a new game is just to much......i bet if games were less about 20-30 piracy would be very low....they seem not to understand some of the reason for piracy is cause software/game companies over charge people...greedy bastages
    For the very reason of the $50 game price is why I've been entertaining the thought of buying a PS2. Don't get me wrong, I love the Xbox, but with so many PS2 games at $20 or less, I'm willing to give to the Sony executive yacht fund.

    I'm no longer going to be biased against a sub par system (that doesn't hold a candle to the Dreamcast) now that developers have figured the system out and are turning out some solid games that the Xbox does not have. If I can get a new PS2 at $150 I'm sold. But if the price stays at $199 it will stay on the shelf a bit longer.
    Those who say the game sucks, simply suck at the game.

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    GO SEAHAWKS!!!!!!!!!!!!!! l Maximus l's Avatar
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    Originally posted by 0101010
    For the very reason of the $50 game price is why I've been entertaining the thought of buying a PS2. Don't get me wrong, I love the Xbox, but with so many PS2 games at $20 or less, I'm willing to give to the Sony executive yacht fund.

    I'm no longer going to be biased against a sub par system (that doesn't hold a candle to the Dreamcast) now that developers have figured the system out and are turning out some solid games that the Xbox does not have. If I can get a new PS2 at $150 I'm sold. But if the price stays at $199 it will stay on the shelf a bit longer.
    I hope you are speaking for yourself because you definately aren't speaking for me. The XBox has given me the best gaming experience to date. Not even the mighty Dreamcast, in my opinion, holds a candle to it. And, besides, the $20 games that the PS2 has are all crap and not worthy of beer coasters. But, like a said, it's all my opinion.

    This is XBox ADDICT

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    Wasted Talent Casper's Avatar
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    Originally posted by Maximus-XBA
    I hope you are speaking for yourself because you definately aren't speaking for me. The XBox has given me the best gaming experience to date. Not even the mighty Dreamcast, in my opinion, holds a candle to it. And, besides, the $20 games that the PS2 has are all crap and not worthy of beer coasters. But, like a said, it's all my opinion.

    This is XBox ADDICT
    Lookie Lookie

    When you get a chance my drunken DDC brother...get on MSN

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    Originally posted by Maximus-XBA
    And, besides, the $20 games that the PS2 has are all crap and not worthy of beer coasters. But, like a said, it's all my opinion.

    This is XBox ADDICT
    Beer coasters they may be, but some of them look like fun. I just want some platformer games like Spyro or something. All of the really good Xbox titles are too dark and violent for the kiddies.
    Those who say the game sucks, simply suck at the game.

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    Yah!! And also many xbox games are going down in price too. all the way to 19.99, to 29.99. Xbox is definately better than anything else, just so much more polished. makes me appreciate every second i play!
    chill out homes! $%$

    Games I have!!!!!!!!!!!!!!!!!

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    "Bought an xbox to nerd out and get away from drugs"

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    And, besides, the $20 games that the PS2 has are all crap and not worthy of beer coasters.
    I beg to differ with that...the only one I can think of is Red Faction and that is a really good game - come one, who can deny the power and greatness of Geo-mod?

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    I want to eat your brain VenoM's Avatar
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    Originally posted by xboxman_1
    I beg to differ with that...the only one I can think of is Red Faction and that is a really good game - come one, who can deny the power and greatness of Geo-mod?
    ahh...red faction is pretty cool...ive been playing it all day just picked it up a few weeks back..its worth the 17-20 bucks ...cant wait for red faction 2 on xbox ...does the sequal have the same geo-mod destruction also?...i figure it does...there is some good 20 or less titles on the ps2....thats all ive been getting lately since i just got my ps2 last sept.... so ive been getting games i missed when they first came out for the ps2....jak and daxter,soul reaver 2,red faction,zone of the enders,ico...if games were 20 bucks each id have tons and tons of games...developers should think of releasing games at 20 or 25 bucks the most......game sales would go up the roof if games were cheap and piracy would be pretty low but instead they over charge people 50 for a newly released game...bastages

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