Pachter: Console Price Drops This Holiday

Analyst Michael Pachter expects a $US 50 price drop will be hitting both the Playstation 3 and Xbox 360 this holiday, but that it will still be hard for the industry to match last year’s extraordinary holiday sales.

Speaking at the Electronic Gaming Summit this afternoon, Pachter said that he expects an overall slowdown in video game sales over the next three years.

Pachter expects the industry to see 19 percent growth in the U.S. and 20 percent in Europe this year, with his predicted price drop this holiday. Next year, Pachter expects growth to dip to 16 and 18 percent, unless the consoles drop another $US 100, which would add another five percent to growth. In 2010 growth will slow to 10 percent and seven percent, unless consoles drop in price by $US 150, Pachter said.

By the year 2011 Pachter predicts that the industry will flatline unless a new console is introduced.

Wait. That means that game sales will flatten out after six years unless we get a new console. There goes Microsoft’s hopes for a seven year console and Sony’s plans for a ten year one.