So CNN takes an interest in video games every now and then…(”Oh those video games are such a novelty, kids with their toys, they’ll never take off.”) and some editor for the money department had a smidgen of brains and decided to make an incredibly obvious comparison article of the PS2 and Xbox 360.

Quote from the article “The PS2 has always been popular (last holiday, retailers couldn’t keep them in stock), but it faces stiff competition this year.” Wow. Ya think?

Anyway if you want to torture yourself (and check some numbers from economic type folks,) the article is here. The only real interesting bit was this from an industry analyst:

“Analysts are mixed. Michael Pachter of Wedbush Morgan Securities, in an Oct. 10 note, predicted a large cut in the days leading up to the Xbox 360’s launch.”

“We expect a price cut for the PS2 later this year,” he wrote. “We believe that Sony will respond to Microsoft’s (Research) introduction of its next generation console with a cut from $149 to $99 some time before the November 22 Xbox 360 launch. We think that Sony has positioned itself to lower price by reducing the production costs of its console when it redesigned the box to a smaller format.”

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versus this posted later in the article:

“American Technology Research’s P.J. McNealy agrees that price cuts are unlikely.”

“Sony has had good PlayStation 2 hardware volume so far this year,” he said. “Their focus right now is to drive PSP hardware more than anything else. Sony also doesn’t want to be perceived as responding to Microsoft and the 360 launch by trying to grab our attention with a PS2 price cut.”

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So who’s right? You decide. I’m inclined to agree with McNealy in the line of thinking that the PSP hardware will be Sony’s track, but I’m less sure of a lack of price cutting. I think we’re more likely to see a price cut from 149 to maybe 129, in the form of a nationwide sale (thus commanding more prime shelf space from leading retailers EB Games and Gamespot,) that will last perhaps 4-8 weeks until the holiday season ends. That seems like a much more reasonable route for Sony to take, knowing that price is the only margin that PS2 can compete with Xbox 360 on, yet by losing significant money on a system that is about to be replaced, they’ll only be hurting future PS3 sales.

As always, post your thoughts in the forum.

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