Pachter Claims Industry is Suffering from Price Fatigue
Though industry analyst Michael Pachter isn’t known for his accurate predictions of monthly console sales, what he is good at is analyzing the industry as a whole and figuring out where it’s headed. And with last month’s NPD data coming out disappointing for every home console, Pachter was compelled to inform us why this is happening and how long the industry’s declining sales performance will last.
“We are most troubled by the decline in sales of the three major consoles. On a year-over-year basis in June, combined console sales were down 30%, with consoles down 41% and handhelds down 17%.”
The weak sales figures that have occured during the past four months are expected to continue on for at least another month, if not longer. While some claim that a weak software lineup compared to last year is to blame, Pachter is quick to shut down these excuses.
“We don’t think that a weak software lineup is enough to explain what happened, and can only conclude that consumers aren’t sufficiently interested in buying consoles to drive sales higher each month.
We attribute this lack of interest to price fatigue, and note that the Wii has gone longer than any console in history without a cut of its launch price, while the PS3 has gone more than 18 months without a cut. As there has not been a console price cut so far this month, we expect a similar result in July.”
The problem of course may not be the prices of home consoles, but the fact that consumers are now particularly careful about their purchasing habits. And regardless if a console is priced at $400 or $200, it’s still a hefty chunk of cash. As we’ve seen before, shaving down your MSRP doesn’t necessarily lead to huge gains in hardware sales. The effects are usually small, and temporary.
For now, it may be best for the industry to wait out the storm and make software and services the big draw of purchasing a game console, not the asking price.
[Source]
9 Responses to “Pachter Claims Industry is Suffering from Price Fatigue”
Price cuts make a huge difference. Here’s to hoping the Trey goes down in price and more friends can join us in on the entertainment!
Its just bad timing..
all the games announced where being released at the exact same time (not spread apart). Which i can understand based on development time.
also the games are new IP’s and there afraid of poor sales. CODMW2 is not going to devour ever freakin game out. Thats giving activision to much credit. All the new games will have to fight each other out next year so realistically there just postponing the inevitable. Thats why i said before they need faith in there products”. A good game, is a good game, regardless of whats out. Last year Sony had MGS4 a system seller.. now it has nothing for this month…except blazblue and King of the fighter’s. Which is mutiplatform btw…The price factor is not going to stop someone from buying a system. now Sony’s claim of having a ton of new IP’s has been shifted to 2010. minus UC2 and any other game thats a Sony license coming out this year. Any bad ass game can obliterate them next year too. So these games being shifted to next year can easily fail..
pachter is a shit head. I mean, seriously? The economy is all fucked up and his genius observation is that luxury electronics aren’t selling well due to price fatigue????
GTFO
this is the last time i read an article that has anything to do with pachter. this dude as far as i am concerned is MR OBVIOUS. everything hes said is something ive already heard on the news two months ago. thanks for nothing again.
but at least he put some numbers in there this time.
@shadowjin
You nailed it. In fact, I don’t understand how they don’t see God of War III (due March 2010) as a huge threat to launching a title then either. Granted it is exclusive to the PS3, but that baby will sell consoles at least on par with MGS4 (I hope). I know COD is huge, but not *everyone* who owns a console plays the things.
Weak software lineup. COORS LIGHT WEAK. That’s why we’re here Pachter, you dummy. I can’t remember the last time I played something on my PSP and do you know what’s in my PS3? R&C Tools of Destruction. Yeah, a game that is YEARS old. Will also be loading up inFamous for a second go-through soon – no sales from me there either.
ummm no triple aaa title coming out in July, yea I think the same thing is gonna happen in July as well.
Can I be famous now?
ITS THE ECONOMY STUPID!!!!
People over leveraged their mortgages and now can not make basic needs payments why would they buy a console price cut or not. They don’t have the money in the bank and Visa/Mastercard are tightening the screws and driving up interest rates on the credit they charge. It is no wonder that sales have fallen off a cliff.
It ain’t gettin’ better any time soon either. Maybe gamers should cry for a Federal Bailout so they can buy more consoles to kill each other with and then the world will be a better place */sarcasm.
Some of these so called experts could not see that truth if it bit them in the arse…
The price of consoles is only part of the problem. Games at $60 each are also a huge turn-off. Who’s going to buy an expensive game system when they’ve got to commit themselves to $60 for every ten hours they want to use the thing?
@ JackC8
Thats exactly how i feel… 60$ for a game? its worth it on some but not every game out.