Wedbush Thinks Lower-Priced Xbox One Will Be Good For GameStop

In a report published Wednesday, Wedbush analyst Michael Pachter reiterated an Outperform rating and $60.00 price target on GameStop (NYSE: GME).In the report, Wedbush noted, “On Tuesday morning, Microsoft announced the June 9 introduction of a new $399 version of the Xbox One that does not include Kinect. The current version of the Xbox One that comes bundled with Kinect retails for $499, a $100 premium to Sony's PlayStation 4. Microsoft has adjusted its strategy after losing the first battle of a long console war."We believe the existing $100 price difference between Xbox One with Kinect and PS4 has been a leading contributor to Sony winning the next-generation console war thus far. On April 16, Sony announced PS4 sell-through of over 7 million consoles worldwide as of April 6. In comparison, on April 17, Microsoft announced Xbox One sell-in of over 5 million consoles worldwide since launch. In our view, the sales delta was not driven primarily by Xbox One's later release date, or by inferior content (on the contrary, as EA's Titanfall was exclusive to Microsoft consoles). Instead, we believe that in the minds of many consumers, Microsoft failed to justify charging $100 more than its rival for Kinect. Microsoft also announced that Kinect will be available as a stand-alone item for Xbox One later this fall, although a price was not disclosed."In our view, Kinect is not seen as a must-have item by many core gamers, at least not yet, and we expect a modest attach rate as a stand-alone item initially.”GameStop closed on Tuesday at $37.85.