Cowen & Company analyst believes Nintendo may announce "badly needed" price cut at E3, says gamers should not expect PS4, Xbox One pricing info or used game details at trade show.
The Wii U is "struggling mightily," according to Cowen & Company analyst Doug Creutz.
In a note to investors today concerning next week's Electronic Entertainment Expo, the industry analyst said the system has come up short during its first seven months on the market, but noted a "badly needed" price cut and key titles could help turn things around.
"After seven months on the market, Nintendo's Wii U is struggling mightily," Creutz said. We note that the company has essentially abandoned the field to Microsoft and Sony at this year's E3 as Nintendo will not be holding a press conference."
"However, we do think there is a decent chance that Nintendo could announce a price cut for the Wii U at E3 in an effort to bring attention to the console and boost sales," he added. We note that the console will have a series of key new games coming out through the late summer and fall, beginning with Pikmin 3 in August. Nintendo's window for igniting interest in its console is closing with Microsoft and Sony's competing machines soon to come to market."
Creutz also said he believes Microsoft and Sony will not share pricing information for the Xbox One or PlayStation 4 next week at E3, instead leaving those details for later events. He also said gamers should also not expect news concerning used game policies for both next-gen platforms.
Microsoft and Sony have confirmed that secondhand titles will play on their future platforms, but have yet to give specific information about how this will work. Creutz described Microsoft and Sony's intentions towards the used game market as issues that are "critical."
He said if Microsoft and Sony do decide to implement a significant tax on used games, they run the risk of damaging GameStop's business model (in turn hurting the broader gaming ecosystem) and seeing "significant gamer backlash" that could hurt sales of new consoles.
"We also believe Microsoft likely knows this and thus is unlikely to fumble the ball at the 1-yard line on this issue by getting greedy," he said. "However, we suspect they will avoid the issue as much as possible at E3, despite calls from the gaming community for clarity."
In addition, Creutz shared his thoughts on how Microsoft and Sony should market the Xbox One and PS4 during their E3 briefings next week.
"Microsoft needs to make its case for the Xbox One to the core gaming community after its
initial launch clearly focused on the broader audience for media and entertainment," he said. "While we think pursuing the mass market strategy is correct (Microsoft reputedly hopes to sell
400 million Xbox Ones during its lifetime, more than 2.5x the sales total of the PS2 and 4x
that of the Wii), the console still needs to appeal to its core gamer constituency to get off
to a good start and generate positive buzz. We suspect Microsoft will not disappoint in this
"In contrast, Sony has focused its early message squarely on the gaming community.
Sony's challenge at E3 is simply to reestablish relevance given the decisive lead Microsoft
has built on current-gen (at least outside of Japan)," he said. "We also expect Sony to showcase
some of the non-gaming aspects of the console; however, the PS4 needs to not come off
as 'me-too' relative to the Xbox One."
E3 2013 kicks off Monday, June 10 with briefings from Microsoft, Electronic Arts, Ubisoft, and Sony. GameSpot will have full coverage of all happenings of the show.