Recent speculation from analysts have cast Microsofts 360 price cut as increasing sales of the console only modestly. Despite the fact that the Xbox 360 Arcade SKU has undercut Nintendos Wii to become the cheapest current generation system, Wedbush Morgan analyst Michael Pachter expected the decrease to drive only an additional 15-20 percent sales over the next twelve months, while EEDR analyst Jesse Divnich has stated that the console can figure on only a 20-30 percent bump in the short term.
But some of GameStops top executives are telling a different story. Speaking to Edge at GameStop Expo in Las Vegas, the retailers senior vice president of merchandising Bob McKenzie and executive vice president of merchandise and marketing Tony Bartel feel that, at least for GameStop, such estimates are overly conservative.
According to McKenzie, [We expect Xbox 360 sales to have] more in the range of a two to fourfold increase. Its significant.
Even since the markdown last Friday, says McKenzie, we have seen significant increases in sell-through. You would expect higher sales initially, but were actually much more bullish on our projections of what this markdown will do.
But then, why should the company be so optimistic? It is after all not an enormous price cut, with most of the models only shedding $50. Yet according to McKenzie even drops of that nature are powerful. Its very psychological. .. It creates a big opportunity for the first-time gamer whove been afraid to step up to a next generation system. McKenzie also thinks that the new tags of $199/$299/$399 make all those price points much more retail friendly.
Of course, its not just low prices that will drive consumers to Xbox. Bartel tells us that combined with a new proliferation of titles rated E for Everyone will make the system more palatable to what is now referred to as the expanded audience.
Thats not to say that the Wii is in any trouble from the 360s expected audience expansion, however. Bartel doesnt believe that Microsoft will be able to steal any sales from Nintendo, saying that there is an overlap in reference to consumers who will just end up owning both consoles.
The company is naturally still expecting great things from Wii sell-through rates. We still dont know where the bottom is for the Wii because we cant keep it on the shelves, Bartel explains. We anticipate demand for the Wii will continue through the holiday season.
Spurring this continued demand is a flurry of new software titles, many of which were presented to the retailer Tuesday at GameStop Expo in Las Vegas. What were seeing during this Gamestop Expo is an exponential increase in the number of games coming to Wii over last year, say Bartel. I think last year, publishers were waiting to see if it would hold on and now everyones convinced. Now everyones jumping in. He adds that the largest increase in sales of games is happening on the Wii and DS.
And what of Sonys PlayStation 3? While it may not have the new price tag of the 360 or the massive software lineup of the Wii, Bartel says GameStop expects strong performance from it nevertheless. Its my second-highest category as far as the percentage of new releases over the last year, he tells us. Mentioning the releases of Grand Theft Auto IV in April and Metal Gear Solid 4 in June, he explains that, those two games alone have brought PS3 to a critical mass now, where there are enough consoles out there where its meaningful to publishers.
As to what will move PlayStations off the shelves for Christmas, Bartel cites Resistance 2 and LittleBigPlanet as products that will really help spur our sales.
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