Electronic Arts Inc., the world’s biggest video game publisher, has reduced prices on some titles by 20 percent to spur sales and thwart competition, an analyst said on Monday.
“NBA Live 06” and racing titles “Burnout Revenge” and “NASCAR 06” were among the console games subject to the price cut from $49.99 to $39.99, Banc of America Securities research analyst Gary Cooper said in a client note.
Video game sales have been soft in recent months as consumers await new console technology. Microsoft Corp. is releasing the Xbox 360, the first next-generation gaming machine from a major player, on Nov. 22.
Some video game publishers had predicted that prices on existing console games would be cut by $10 around the debut of the new machines.
EA spokesman Jeff Brown said there is no change in EA’s pricing policy.
“At EA, we make pricing decisions on a title-by-title, market-by-market basis,” Brown said in an e-mail to Reuters.
“As we’ve said in our quarterly reports, this point in the console transition is historically marked by softness in pricing,” said Brown, who added that some games don’t hold premium pricing as long as they would earlier in the cycle.
Cooper said he believed EA also reduced prices on super hero game “Marvel Nemesis” and extreme sports title “SSX On Tour” due to sluggish sales. He said it appeared that EA trimmed the prices on sports games to stimulate sales.
“Lower prices are likely to stimulate increased demand, but to what degree is unknown,” Cooper said.
Cooper noted that lower prices would pressure gross margins but that EA may be able to offset the impact by cutting marketing spending as store traffic increases.
Other games selling for the lower price tag are “Tiger Woods PGA Tour 06” and “Need for Speed: Rivals” for Sony Corp. PlayStation Portable. Cooper said EA is releasing a new version of “Need For Speed: Rivals” this weekend.
Cooper expects EA to make similar price cuts on its popular football game “Madden 06” after the Thanksgiving weekend. He said it was possible that EA would cut the price on soccer title “FIFA 06” by $10 in December.
