Analyst Says...

"Buried in an analyst's memo, written shortly after last week's Electronic Arts earnings call, was a hidden gem. According to the widely read team at Wedbush Morgan Securities, Sony may delay the release of the PlayStation 3 until 2007--if exactly the right conditions prevail.

In a research memo sent to investors, Wedbush senior analyst Michael Pachter set up the following scene for a delayed PS3 launch. It starts with the current-generation Xbox being priced down to $99 post-Xbox 360 launch, but no lower. Concurrent with that situation--an Xbox 360 at an unspecified price and the Xbox at $99--Sony would drop the price of the PlayStation 2 to $99.

There are two components to that pricing strategy: the first is that a $99 PS2 would offer a significant distraction as the 360 launches. As Pachter states: "We believe that the company will attempt to disrupt the Xbox 360 launch with a price cut, and as a result may succeed in diverting attention away from the higher-priced next-generation console." Full Article

I personally think that given a choice between the PS2 and Xbox 360, there is no way I will spend $99 of my Xbox 360 spending money for a last generation console. The Xbox 360 will be a new console, therefore, people will be more excited. Yeah, you save $50 from the current PS2 pricing, but is $50 that much? Just trade in some other system, and maybe you'll lose one game with the price, get it used! I have no doubt the PS2 will go down, but it delaying the PS3 for it the right move?