Microsoft has room to cut 360 S and Kinect prices in early 2011
Pachter weighs in on multiple SKU prices for motion controller
Microsoft's pricing for motion control peripheral Kinect and the new premium Xbox 360 S model has left the company with plenty of room to cut prices early next year.
That's according to Wedbush Morgan's Michael Pachter, who said that the $299 price for the new 250GB Xbox suggests the SKU is "very profitable".
"The only meaningful difference between the Arcade and Standard Slim Xbox 360s is the inclusion of a 250GB hard drive, suggesting to us that Microsoft has at least $50 of room to cut price on the more expensive SKU," he told investors.
"While we don't expect a hardware price cut from Microsoft until next year, we think that pricing on the new arcade SKU is a signal that price is coming down next year."
With the 4GB 360 retailing for $199 in the US and bundled with the Kinect peripheral for only $100 more, Pachter suggested that Microsoft would be content to sell Kinect at less than its current $149 standalone price.
"This suggests to us that the company has room to cut the price of Kinect to $100, and we expect them to do so early next year."
He added that the $149 price for Kinect was too expensive, and only expects a small uptake by the hardcore games consumer.
"Our bias is that most core gamers will wait for pricing to come down, but that 5-10 per cent will buy it. That suggests 2 – 4 million standalone units by the end of March 2011."