Pachter predicts console price cuts

Analyst Michael Pachter has predicted that there will be console price cuts in 2011.

Speaking to Industry Gamers, Pachter said that lowering hardware prices will help combat the current financial slump in the gaming sector.

"We believe that sticky price points for the three major consoles triggered a 5% overall decline in console hardware unit sales for 2010," he said. "Handhelds performed even worse, with unit sales down 25%, contributing to continuing software weakness."

The industry expert went on to say that he expects Sony to be the first platform holder to lower its prices. "We fully expect each of the three consoles to be offered at lower prices in 2011, with Sony likely leading the way as its manufacturing costs continue to decline," he added.

"A $50 price cut should be sufficient to drive 5% software sales growth; and, coupled with a resurgence in handheld software sales and an easy comparison for music sales, we think that overall software sales growth could hit low double digits in 2011."

The NPD figures for December were released earlier this week, revealing that the Xbox 360 was the only console to see a year-over-year increase.