Cowen & Company analyst Doug Creutz has said that Sony, Microsoft and Nintendo will need to trim hardware prices in order to stimulate software sales and console adoption over the Christmas holiday season.
"None of the hardware manufacturers have reduced their hardware prices since the last holiday. However, our survey results indicate that prospective hardware buyers have reduced the price that they are willing to pay for hardware,” said Creutz, during the company’s 2010 Video Game Survey report.
"In our survey last year, average prices that our respondents were willing to pay matched fairly closely with prevailing hardware retail price points, but this year the gap is $30 or more for all of the three consoles."
Creutz also suggested that potential buyers aren’t being swayed by the release of Sony and Microsoft’s new motion-sensing peripherals, and feels cutting costs would have delivered a far greater shot in the arm to hardware performance than the impact of PlayStation Move and Kinect.
"We believe that the hardware manufacturers have left unit sales on the table by not reducing price points from $199 to $179 and $299 to $249 for the applicable consoles, and that doing so would have driven a more significant boost to hardware sales than the release (for Microsoft and Sony) of new motion-sensing peripherals," offered Creutz.
"We view continued stubbornly high hardware price points as one of the key factors dragging down software sales."
"Although our survey results show strong demand for the two new motion sensing peripherals among current Xbox 360 and PS3 owners, demand among non-owners and prospective buyers appears tepid," he concluded.