Market rebound unlikely unless we get hardware price cuts

Ahead of the publication of the June US video games market numbers, Wedbush Morgan analyst Michael Pachter has predicted big drops for every major format.

We expect hardware sales of 325,000 Wii units (down 23 per cent year-on-year), 355,000 Xbox 360 units (down 21 per cent year-on-year), 240,000 PS3 units (down 21 per cent year-on-year), 290,000 DS units (down 43 per cent year-on-year), and 165,000 3DS units.

Overall, we expect hardware unit sales to be down 21%, with console hardware unit sales down 24 per cent and handheld hardware unit sales down 15 per cent.”

Pachter goes on to reassert his belief that the market won’t enter a cycle of recovery until both Sony and Microsoft cut the prices of their home console platforms.

We continue to believe that sustained software sales growth will remain elusive until hardware sales rebound for an extended period of time. In our view, given the 3DS’ weak debut and the likely limited impact from May’s Wii and June’s DS Lite price cuts, a rebound is unlikely to happen until Microsoft and Sony cut the price of their consoles.

Given the phenomenal sales growth that the Xbox 360 console has seen this year, we believe Microsoft will wait until the holidays or until sales decline before considering a price cut.”

MCV revealed last month that Sony is preparing to reveal a PS3 price cut at Gamescom next month that could result in the machine retailing for as little as 179.99.