Industry execs hoping for further price cuts

IDG report shows demand for further hardware price adjustment.

A new report based on interviews with key videogames industry executives has called for further price cuts to the Xbox and PS2 ahead of the Christmas sales season, in the hope of "jump starting" sales of software.

The report, which was published this week ahead of the announcement of European price cuts for the Xbox and PS2, was created by IDG Entertainment and used input from over 50 publishers, developers, retailers, investment bankers and analysts.

"Everyone is hoping for price cuts on hardware," according to report editor Wes Nihei, "and [is saying that] the health of the industry is tied to both Microsoft and Sony giving in this year [and cutting prices]."

The report, which is IDG's 12th annual Industry White Paper publication, also addressed concerns over the price erosion of software, which is reducing the size of the full-price sales window dramatically, and discussed the dangers of the increasingly hit-driven industry model.

While much of the content of the report makes sense, it does seem unusual that key executives would be calling for another price cut only a few months after both Microsoft and Sony slashed prices in the USA. However, although expectations for the coming months at US retail are strong, many in the industry feel that the spring cuts were not far-reaching enough, and hope to see additional price changes during the coming quarter.

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