Do Holiday Console Price Cuts Matter? - Features ... - Game Informer

Recently all three of the current home consoles announced a price cut or at least a new value proposition for their system. Will this have a huge effect this holiday season?

Within the space of a month, all three console manufacturers announced new pricing and/or configurations for their systems. Microsoft has cut the price of its Xbox 360 bundles by $50, the Wii dropped down to $130 (as part of a jam-packed bundle), and the PS3 has a new model that includes a 500GB bundle with Assassin's Creed III (for $299) as well as a smaller 250GB version that's cheaper ($269) and which comes with the Game of the Year edition of Uncharted 3.

While the Wii U comes out on November 18, and therefore the stakes aren't the same for the Wii as with the other systems, Jesse Divnich, vice president of insights and analysis at market research firm EEDAR, thinks that the recent round of price drops and bundling is par for the course.

Divnich says that straight hardware price cuts are effective early in the console cycle, while later on software bundles "play a larger role in increasing demand." Thus, he's not expecting the lower prices alone to make much of a change in the overall console race, but "success this holiday season will come down to the software and who has the best available bundles." He also states that bundle buyers tend to be new adopters who are in his view "much more lucrative to a hardware manufacturer."

If it's a "bundle war," as Divnich puts it, then it could get intense. Each console has something to call its own. Sony with the aforementioned triple-A games, Microsoft with both an upcoming Halo 4 Limited Edition bundle and a Kinect bundle, and the Wii with a package that includes the Wii MotionPlus, Wii Sports, and Wii Sports Resort.

Divnich predicts: "The 2012 holiday will have the most aggressive Black Friday bundles ever."

Source: http://www.gameinformer.com/b/features/archive/2012/10/18/do-holiday-console-price-cuts-matter.aspx

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