All purpose sales and sales rumors/anecdotes thread next gen+

Standard manufacturing business principles - inventory weighs on your books. You manage it as carefully as possible.

 

IF I'm taking this correctly they are talking about both sets of chips to console makers and they aren't worried about their inventory getting too big at this point. I think they expect Sony to order significantly more for 2nd half and enough to offset whatever buildup MS may or may not have. I would also expect that AMD expects MS to manage their inventory pretty well going forward towards the holiday season. Might revise that E3 prediction in terms of of a price cut.

Assuming a BD-less version is well on it's way for say an October or early November release that would be where they would make the biggest price drop. The new sku would be priced to sell. That is why I didn't think much of a big price drop before then. Now I wonder if MS would just assume take the 50 dollar hit, just before E3, increase the interest with a good showing there and just ride that out till the new sku and see what happens.

I was thinking they would just have a bunch of digital bundle sales rotating around, acting as an unofficial price cut, till the fall and then drop the new sku and the new lower price for the xb1 "classic". Now if AMD isn't seeing any inventory issues then maybe they think that between Sony and MS sales will be robust combined ( maybe a better showing for the WII U as well to help out )

 

Also interesting. So there's no significant saving in high volume production to make longer-term stocking profitable.

 

It's been a while since I studied this stuff but surely a non perishable and non upgradable item like a games console could in theory sit somewhere for a little while with no negative consequences? No? Any console they can't sell right now can still be sold at any time this year or the next...

 

Well there is at least opportunity costs for the money that is attached to those manufactured consoles instead of that money being somewhere else which could bring income. Also the manufacturing costs of a console likely goes down as time passes so producing them in the future should be doubly beneficial.

 

There's warehousing costs and insurance for the products as well.

 

Not to mention that you just plain have less capital when you have lots of product.

 

Bingo

 

Also if MS does not own their own warehouses, they need to pay for storing unsold consoles.

 

Yes. And even for a company like Microsoft, following Surface financial write downs the last thing they would want to signal to investors is further proof they cannot (hardware) inventory manage, just as they are about the become the second largest phone manufacturer...

 

The second huh what who??

 

The Nokia handheld purchase went through today, making MS the second largest handset vendor, and, ironically, a significant player in the Android handset market.

 

And remember this is Titanfall release month [shock] the rest of the year looks dull WRT announced titles

dwaaarp dwaaarp dwaaarp dwaaarp abandon ship
they have to cut price now, or else gulp it was nice knowing you xbox

 

Lets see what is announced at E3, I honestly am somewhat convinced Sony will screw up and lets be honest MS isn't going to sit back and allow Sony to dominate without a fight. Sony seems to be having some issues at the studios, I doubt we'll see UC 4 anytime soon. Drive Club still isn't released, there are signs that there are some issues and I expect E3 to be very interesting perhaps not due to the announcements but for what isn't like release dates. If Sony continues to sell hardware at a record pace but the software doesn't come sooner than later there will be consequences.

 

I don't see Sony screwing it up. They have too many talented teams, I know they're holding a lot back for E3. I think they're both aiming to leave a big impression.

 

The unsold stock would depreciate over time causing a balance sheet loss. If they hold a large number of unsold units and cut the price then they would have to impair their inventory which would cause a large loss.

Paying for storage, insurance, extra shipping to and from the warehouse would have to be amortised into those units, which would lower the profit margin, which is already low or negative.

 

^ ^ That's why I'm in Sales now