Sales in the videogame market not up to par?


Price cuts for the Xbox and the PlayStation2, are likely to begin as soon as this month, due to slowing retail sales according to analysts.

Analyst Edward Williams, said he believes price cuts will be announced at the industry's annual Electronic Entertainment Expo (E3) because a drop in sales has retailers worried ahead of the summer, usually the industry's weakest season.

Microsoft will bring the Xbox down to $199 from $299 at a news conference scheduled for May 20. Sony, the market leader, will likely follow, also cutting the PS2 price to $199 from $299, Williams said. He also expects the price of Sony's older PlayStation One console to be cut to $79 from $99.

"Given a need to increase its installed base and a lack of exclusive key titles to help do so, we expect Microsoft could use this opportunity to pre-empt Sony and take a leadership position in dropping the price of Xbox," he said.

Rumors have repeatedly cropped up since last summer that a PS2 price cut was imminent, and analysts are still generally divided as to whether Sony might cut the price at E3, or in September, at the start of the strong fall and winter season.

As for Nintendo's GameCube, which came out at a price of $199, 3 days after Xbox's launch in November, Williams said a price cut at E3 was unlikely, though a cut to $149 is possible this fall as Nintendo releases a number of anticipated game titles.