Following the NPD's July video game sales data, which revealed just a bit over 200,000 units sold for Microsoft's Xbox 360, Wedbush Morgan Securities analyst Michael Pachter has proclaimed demand for the platform to be "stagnant." Rumors have swirled that Microsoft is preparing to cut prices across its hardware SKUs – a move that UBS analyst Ben Schachter believes would have a "significant impact."
Pachter commented, "Xbox 360 hardware sales were again lighter than we expected, indicating that Microsoft may be experiencing stagnant demand. The company cut the price of its Xbox 360 Pro (20GB) by $50 to $299 in July, but demand remained fairly flat. We do not expect a significant bump in August with the release of the new Pro 60GB at $349. We expect Microsoft to reconsider its pricing strategy, especially if sales of the Xbox 360 continue to lag sales of the PS3."
Despite a slight slowdown in hardware sales overall for the July period, Pachter believes that "underlying software sales strength along with increased hardware supply position the industry for continued strong sales through 2008." He said that his current software sales growth forecast for 2008 (which includes PC games) of 19 percent is "clearly too low" and Wedbush will issue a revised sales forecast in the coming weeks.