"That assumes that there will be price cuts on the PS3 and potentially one on the Wii," said DeMatteo, adding however that "it’s hard to tell if we actually need a price cut on the Wii to get to our numbers. There are some price cuts built into that assumption, but not until the third quarter."
DeMatteo also says that the current price of the consoles is too high given the global economic recession.
"The hardware price points, given this economic environment are potentially too high, and if the platform holders are going to make the numbers that they forecasted for the year, those prices would have to change.
"Also, if you think about it, these hardware prices have stayed up longer in this cycle than in any other time before, and in a very dire economic environment, those two things seem to be mutually exclusive.
"Put all those things together, I think that there will have to be price cuts in order to get the hardware moving to where it needs to be," he concluded.