I guess Wedbush Morgan analyst Michael Pachter feels that 2009 is critical to Sony. I’m not necessarily with him on that, though. Is being in last place really that dire of a situation?
He tells CVG that Sony “is falling behind at a rapid pace,” stating that a price cut is needed. No argument there.
“The most important thing for the company to do is to get the PS3 production cost down, and it appears to be making progress on that front,” said the analyst.”
“Keeping the PS3 price high kills Sony, and gives Microsoft a huge competitive advantage. In my view, every Xbox 360 sold is a lost opportunity for Sony to sell a PS3, and Microsoft has no intention of taking a sabbatical.”
Sony is a big company, with much more going on than just its PlayStation brand. If anything were to “kill” Sony, it would be America’s failing economy, and not necessarily its games division. And I don’t see how a price cut on one game system would change much in Sony’s overall financial outlook. But then again, I’m not a paid analyst either.
Pachter continues: “Lowering the price will cost Sony a lot, but it should generate sufficient future profits from game and Blu-ray movie sales and royalties to offset those losses.”
He thinks that there is a 40 percent chance of a price cut by holiday 2009, 25 percent by TGS, and 20 percent by E3. By April, he gives it a 5 percent chance.
“That leaves a ten percent chance that Sony won’t cut price in 2009 at all, which I think would be a mistake,” he added.
