Following Nintendo's recent media and analyst summit in Seattle this week, Lazard Capital Markets analyst Colin Sebastian has made some interesting observations in his most recent report. Perhaps his most significant comment was on the production rates of the Wii and PlayStation 3.
Sebastian thinks that despite increased Wii production, shortages could persist. And he sees slowing PS3 production as a sign that a price cut on the console may actually not occur this year.
"We believe that Nintendo may be near its targeted monthly Wii production of approximately 1.5 million units per month, based on comments made by Nintendo, as well as retailers such as GameStop. Based on our retail channel checks, demand still appears to exceed supply, and we believe that shortages could persist through the remainder of the year, including the key holiday period," he said. "Reports from Asia also suggest that Sony has reduced production of PS3s, at least temporarily, which may suggest that a price cut is less likely this year. We continue to believe timing of Sony's first PS3 price cut is likely to accompany a stronger software release lineup as well as further cuts in production and component costs."