Interview: Pachter Says Console Sales Still OK, But Expect Holiday Price Drops

Wedbush Morgan analyst Michael Pachter said that Nintendo's lead over its competitors in hardware sales is no cause for alarm for Sony and Microsoft, even though console sales in the recent month saw declines Xbox 360 and the Wii declining over the month prior. Even though console sales are still within expectations, the analyst said the Xbox 360 and PS3 will see at least a $50 price reduction by the Holiday.

"I don't really think that Microsoft and Sony are doing badly - just doing badly in comparison to Nintendo," Pachter said. "It makes sense that PS3 and 360 are doing about the same... instead of saying 'what's wrong with Sony and Microsoft,' we should be looking at Nintendo and saying, 'how the hell do they keep doing this?'"

It's easy to peg the answers on the price discrepancies, but Pachter said that's not all there is to it, pointing to Nintendo's success in a mainstream market most gamers are less aware of. "There really are people who play games that don't read Kotaku - I know it's hard to believe," he said. "There are people out there who don't even know how to spell Kotaku, and don't even know that there are websites dedicated to games."

Calling the typical console-fanboy attitude "extremely myopic," Pachter added, "There are actually people out there who have sex. The people on Kotaku, other than their parents, they've never met anyone who's had sex."

Mainstream gamers are mad about Wii Fit, Pachter said, agreeing with fellow analyst Billy Pidgeon who predicted that the Wii would not balance its supply with demand until 2009. So no price drop for Wii anytime soon - but what about the others?

"You'll get a price cut," said Pachter. "I think if I were Sony, I would wait for the Fall, or for the Christmas lineup. There's no reason for them to cut it today [with MGS 4 out]."

Pachter thinks it's likely to see a $50 reduction in the PS3's price. "They'll go $100 if they can afford to," he said, possibly close to the release of LittleBigPlanet, taking a "family bundle" angle.

As for Microsoft, Pachter said they won't stand for having the 360 and PS3 on level pricing ground, and will probably implement their own price drop commensurately. "Madden was an event for Microsoft last year, so perhaps you'll get a 360 cut with Madden. But I think if I were Microsoft, I'd maybe cut it in front of Gears 2."

Pachter also anticipates possible future supply constraints for Wii, based on Nintendo's history of consistently underestimating demand - he also thinks their attach rate estimates for Wii Fit are a bit lower than they'll turn out to be.