Also, as more and more consoles are bought for reasons other than games, you can't made the assumption of selling a $600 box for $400 and make it up in games. Remember that the PS3 was for a long time the cheapest and best Bluray player simply because Sony was effectively subsidizing its cost to the tune of $220. In is new world, that can't happen anymore.
Business Approach Comparison Sony PS4 and Microsoft Xbox
- Thread starter BRiT
- Start date
Also, as more and more consoles are bought for reasons other than games, you can't made the assumption of selling a $600 box for $400 and make it up in games. Remember that the PS3 was for a long time the cheapest and best Bluray player simply because Sony was effectively subsidizing its cost to the tune of $220. In is new world, that can't happen anymore.
Eastmen makes good points about the OS. You both are probably mentioning The Playroom which will be bundled with every PS4 system, which is strange considering you really need the PSeye in order to use it. We both say that they never or did plan on it, there's not really anything to dispute it either way. I just find it odd that they built-in a light into the DS4 & then decided not to include the one device in the system that would make the light useful out-of-the-box. I think there is some circumstantial evidence that points to at least it being considered part of one SKU. Guess we'll never know unless somebody writes a book about it.
P.S. Offering a 2nd more expensive $499 SKU doesn't preclude them from targeting a $399 SKU from the word go.
Tommy McClain
Yeah, I was always surprised how overlooked that 499 SKU was at the time. And by consumers too, the vast majority sold were 599.
I too like the single SKU strategy this gen. Particularly in MS case with Kinect/non kinect SKU's, it got a little ridiculous at times. Asking stores to stock 4 SKU's ongoing (4GB, 250GB, w/without Kinect) seems like a problem
I wonder how many total SKU's of each console there were...at a guess at least over 20.
I am already wondering if things go badly enough, if MS will have to pull out a 399 or even 299 no Kinect SKU at some point.
It's weird, the 20GB launch PS3 got branded with the "tard pack" stigma the no hard drive 360 got. This despite the fact that the 20GB PS3 matched the premium 360 feature for feature, and added Bluray playback. Its controller was wireless. You didn't have to buy a $40, 64MB memory card to even use it. And yet, people still looked at it as the "shitty version", I think largely because MS had poisoned the well with their SKU strategy.
Yes, by having a successful 2 SKU strategy MS managed to ruin Sony's ability to manage the same. The fact is that Sony barely shipped the 20GB model outside of Japan, I'm not sure how it was ever supposed to be a successful SKU given its handling. (That and mandatory installs made the 20GB seem somewhat anemic.)
hesido
Regular
Or it may mean XB1 is selling at a decent loss, with PS4 selling break-even. We can't be sure, but I remember a cost analysis thread, if I'm not dreaming.
I'm sure they'd go for a $50 reduction if they knew it would double the sales, the income from PSN plus subscription fees would not be something to scoff at. But I can't imagine that being the case.
Last edited by a moderator:
It had a a lot to do with use cases at the time, and how it all affected pricing schemes.
The 360 didn't need a HDD when digital content wasn't necessary, saved games on memory cards were still a thing, and DVD storage along w/ drive speed was good enough. If anything, you can see all the areas where MS were trying to cut costs, and it definitely helped their pricing perception early in the console's lifecycle for sales.
I think maybe that's one thing MS is going for with the Kinect, copying Sony's insistence on certain things that are standard for their product vision. Only in this case MS can easily eat the early costs without ever worrying of going broke.
The Kinect is their way of trying to bring the smartphone experience to consoles, and a iOS-like approach to their connected platform/ecosystem. Maybe it'll be successful with enough time and massive marketing, or it'll at least gain some solid market traction before it's all said and done.
In practical terms:
"$50 profit" = $449 vs $499
"$0 profit" = $399 vs $499
That is a very significant pricing difference in the eyes of a consumer.
It's impossible to say "this doubles sales", but I'd expect a significant increase in sales worldwide due to that pricing.
Had nothing to do with MS poisoning the well. The biggest issue was the cosmetic difference (no chrome).
I don't really no why, but consumer don't readily accept lower tiered skus when there is a cosmetic difference that separate skus.
I think both MS and Sony have seen research that cosmetic differences have an impact on consumer choice. And they intentionally designed their lower priced skus to be unattractive to the majority of gamers while serving more frugal consumers. You can't tell me Sony saved a ton of dough by avoiding chrome on the 20Gb. Both wanted to push gamers to the higher priced skus and basically got what they wanted.
I think with a cosmetic difference, it becomes the understated way to say "you bought the expensive one" without having to put a label that says "you bought the expensive one" right on the console. When you see the chrome, you have some weird peace of mind that you didn't compromise.
Not only that, but the outside world also now knows that "you bought the expensive one."
For example, do you think that BMW would sell as many 3.5 liter engine cars instead of 2.8 liter if there wasn't a "335i" vs a "328i" on the back? I think Sony and MS learned this lesson as well.
Agreed.
Furthermore, I think the reason we are not even seeing at least one official sku from Sony with PSEye included is that they want to cement the price difference between the XB1 and the PS4.
True, it could also create a perception that validates MS' position of including Kinect in every box as a "killer" technological feature. I think the one (and maybe only) hardware comparison Sony wants to avoid is PSeye vs. Kinect. Even for the layperson I think Kinect will seem superior if only for the natural voice controls (i.e. "Xbox on").
Johnny Awesome
Veteran
Yes. Sony is betting the farm that consumers won't care about Kinect, but MS are betting heavily that they will. It'll be interesting to see what happens.
Large cable and media Companies like Comcast in the US are beginning to market services matching the the XB services. Voice search being a primary feature in their new X1 service. MS may not have been far off in their research but what happens when cables companies effectively match the benefits of Kinect with commodity cable boxes?
I dont think thats any different than samsung integrating apps, skype, gestures, and voice search directly into their TVs. Xbox will be a premium experience compared to these other options and will also consolidate all the entertainment pieces in a single interface where the others will only be able to account for a portion of them.(i'm including gaming and blu-ray playback)
The one thing i like about xbox is that when you do a natural voice search it searches across all your apps/services to find a movie or TV show. I'm not sure any of the others do something like that.
I dont know, my point was that they would probably sell less 335s if it didn't come with the cache of the "335i" emblem on the trunk.
Google and Sony are also trying to get an IPTV deal; it will be interesting to see how this all plays out....
http://www.engadget.com/2013/07/16/...utm_source=Feed_Classic&utm_campaign=Engadget
Similar threads
