All purpose sales and sales rumors/anecdotes thread next gen+
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I agree completely that to some extent, Sony had their predictions, their targets, based on their own projections. And it's still true that every single company in the world will adjust pricing and strategy according to the competitive landscape, which can always change unpredictably.
So any business will account for those unpredictabilities and then act if need be. I'm not pretending to know Sony's strategy and internal decisions, but I know for a fact that any business, even the ones with the largest market share (which Sony no longer has anyway) will make some decisions to try to slow a competitor's momentum.
I've seen it first hand in completely different markets, and I've seen what happens when those adjustments do not happen - ultimately harming the market leader - because of some intrinsic arrogance.
Am I sure that this is what happened at Sony? Of course not.
Do I think that Sony should have been aggressive, seeing what their biggest competitor was doing at a certain time of the year? Yes!
Do I think there is a correlation between their year-end strategy and Microsoft's year-end strategy? Yes, I believe so. It only shows that Sony are responding to what happens in the market, as they should.
My opinion, based on my business experience. If I'm wrong, then so be it, we'll never know. But it is clear, in my opinion, that part of Sony's year end actions were in response to the competitive landscape.
All they've done since the PS3 has been in response of the competition, and thank God for that! It shows a dynamism and that was sorely needed and, to me, quite surprising, having followed Sony for quite some time.
As MrFox says, those wanting the lower price must have bought before January given both the holiday gift-giving/getting season and the end of the lower price. We all thought the sales would be very front-heavy for XB1 and it'd drop like a brick this year. Changing the price now won't retroactively change people's behaviour, so all those early sales in Nov/Dec have taken away from people wanting XB1's now.
About the only obvious benefit of a second price drop would be if those installed XB1's are generating peer interest and people who are thinking 'I should'a got me one of those' might jump at the chance now. But I reckon we all agree those numbers are minimal and XB1 price is going to plummet. It'll take some months to generate more interest among the currently uninterested. MS really shouldn't have bothered IMO. They should have recognised the pattern of sales they were going to generate and gone with it. Use the lower price over the holidays and then software and marketing to grow interest post-holidays.
About the only obvious benefit of a second price drop would be if those installed XB1's are generating peer interest and people who are thinking 'I should'a got me one of those' might jump at the chance now. But I reckon we all agree those numbers are minimal and XB1 price is going to plummet. It'll take some months to generate more interest among the currently uninterested. MS really shouldn't have bothered IMO. They should have recognised the pattern of sales they were going to generate and gone with it. Use the lower price over the holidays and then software and marketing to grow interest post-holidays.
Do we have numbers on SKU sales? Given MS's reluctance to talk about it, I guess Kinect is pretty defunct. Those that want it will get it any price, and probably play less games, with MS getting usage stats and seeing that, to attract the money-generating users, they need to target the gamers who don't care for Kinect.
As per the PR, they are wanting to see if new XB1 users generate peer interest which turns into sales, for which they use the XBLive stats to see what these new owners are doing with their new consoles. And which one they bought!
It is a bit early to see the discount effect. Wait one week...
D
Deleted member 11852
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I'm conscious that Sony Europe were anticipating (and saw) shortages of supply over the holidays. Being overly aggressive to drive demand only to have demand outstrip supply only results in consumer frustration. Nobody likes to feel like they are missing out on a bargain. Frustration can drive a potential buyer to the other guy.
To me, Sony's end of year strategy looked exactly the same as their holiday strategy for every previous year for every console except during launch years, i.e. some price reductions and bundles. If Microsoft went nuts and sold Xbox at $199 would you expect Sony to react? I wouldn't but I know Sony have a good grasp of the economics of consoles and know that going too low just pushes your point-of-profit that much far back, perhaps beyond a point of any real return. You also have to factor that the financial position of Sony as a whole and Microsoft are different.
You see it as being in response to the competition, I see it in response to R&D, evident market conditions and economics. Paywalling multiplayer in PS+ wasn't in response to Microsoft, it was an economic decision. The greater social integration wasn't in response to Microsoft, it was because that is where the market was going. The 'immediacy' technology designed to get gamers gaming quickly wasn't in response to Microsoft it was because that's the standard in mobile. Day 1 camera support? No, Sony did cameras first. De-prioritising media features, no Xbox 360 had fairly good media features as did PS3. Usual console 'ownership' of games? No, it was the status quo.
And pricing is a culmination of all of these decisions, along with those of the hardware. Naturally a company launching a new product in a crowded market will have a few pricing plans, perhaps more than but certainly including the following:
- "The plan". Your target price and a predicted number of sales, carefully calculated to covers costs and which will hit the estimated return on investment for the project that you told management, the board and investors about.
- "The corrected plan". Your sales and/or returns (games/content due to attach rates) are some way below where they should be or you have an aggressive competitor bleeding your market. You have to reduce costs to increase appeal and sales. This pushes back the estimated return on investment for the project
- "Fuck fuck fuck". Your sales and returns are way off, you'll have to do something seemingly crazy just increase any possible return so as it minimise losses.
Microsoft have sold more consoles as a result of the price cut, which loses them revenue up front. If people would have bought those consoles at $399 in the next few months anyway, then it's flat loss. If they sold a console to somebody who wouldn't have bought one, or would have bought a PS4, then it may well have been worth it - if the investment on those type of consumers compensates any loss the cuts may be costing Microsoft in real terms.
If these sales translate to lots of game sales then it may have been worth it. I don't think we'll really have a feel for this until the next big AAA multi-platform then compare sales across platforms relative to the size of each market.
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Interesting GAF post:
Wii U was ~580k December. Actually not horrible. I'm sure Nintendo hoped for more this year with all the software though.
Drive Club seems to be at 84k US, I think that might even be life to date.
These acronym sales are from creamsugar
Aquamarine posts this
Wii U was ~580k December. Actually not horrible. I'm sure Nintendo hoped for more this year with all the software though.
Drive Club seems to be at 84k US, I think that might even be life to date.
These acronym sales are from creamsugar
Aquamarine posts this
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RancidLunchmeat
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That makes no sense considering the holiday sales bundles with kinect were sold out repeatedly while the ones without were not. They are not impacting the "gamers who don't care for Kinect" one little bit by not continuing the price reduction on the Kinect system and only the castrated version. The fact that this new promotion applies only to the castrated version of the console indicates that MS realizes there is a demand for Kinect.
The issue is that MS doesn't yet know what the price point for demand for Kinect is. All they know is that it is somewhere between $0-$100. At $0, the Kinect versions were flying off the shelves and sold out. At $100, the Kinect versions were crippling sales.
This promotion only on the Kinect-less version allows MS to come back after this promotion ends and run a promotion on only the Kinect version to try and figure out what that price point is. For example, for the next month you can get a Xb0x for $349. In March, they come back and both consoles are priced at $399. Essentially giving the Kinect away for free. Will that also spur sales? It allows MS flexibility in pricing to give the consumer the appearance of good deals in both instances without doing what they really should have done in the beginning which was drop the Kinect version price to $349.
And I have no idea where you're getting the idea that the customers that are buying the Kinect version aren't buying games? That kind of came completely out of left field. Can you explain your logic on that? The best uses for Kinect are the fitness apps and those are the most expensive apps on the One.
RancidLunchmeat
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Huh? The "market" you are referring to here is MS. MS demonstrated with Live that consumers would pay for greater social integration and online multiplayer, so Sony followed suit in order to get another revenue stream. This is exactly what all the PS fans were afraid of and constantly railed against MS and Live for because they feared that Sony would follow suit. And they did.
Paywalling multiplayer on the PS4 was absolutely in response to MS and Live. What other "market" are you talking about where people pay for multiplayer or "greater social integration"?
That's means nothing without knowledge of how many were supplied. Could be MS produced a handful of Kinect SKUs and the market was for two handfuls, so they were sold out. Or they produced 80% Kinect SKUs and sold them all. But given general noise surrounding Kinect (or rather, silence), and anecdotal evidence like the Kinectless SKU being ranked 12th top selling in gaming on Amazon and the Kinect SKU doesn't even register in the top 100, it's hard for me to believe that it's significantly in demand.
Sales of XB1 before the Kinect less SKU were dropping fast. MS also don't talk about Kinect SKU's with any bluster. And the Kinect SKU doesn't chart in sales. I'm interpreting this very differently to you.
It's theory based on MS's choices regards 1 - not talking about Kinect in any significant way in months, including pretty much zero software talk about it, and 2 - saying that they have looked at the consumer engagement over the holidays and are working to give consumers what they want. eg.Phil Spencer:
And Polygon
If everyone's using Kinect, wouldn't that lead them to want to make the Kinect SKU more accessible for those impulse buys?
D
Deleted member 11852
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Sony could have paywalled multiplayer and online with PS3 but they chose to try and do it for free and found out, the hard way, that running an online infrastructure without specific income to support it, is tough. Funding it from profits on hardware, accessories and game is throwing away money. I have zero doubt this was solely an economic decision.
Dedicated paid servers for gaming have been around years, there are a crazy number of companies in this business. I contribute to a paid Minecraft server. Where have you been? Where are you getting paying for social from? None of this is paywalled on PS4.
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djskribbles
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Why do people keep saying that? Like Sony would not have offered holiday bundles/deals if MS didn't have very aggressive pricing.
If Sony really wanted to take the holiday months, they could have tried a lot harder. What they offered was very mild by comparison and is probably what they would have offered regardless of what MS offered. They're probably comfortable where they are and aren't worried about losing a few months of the year in one country.
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Reality the way I see it, dropping to $349 just gives them price parity with the Kinect SKU. Once you add the Kinect later on at $149 you are at the same price, while at the $399 it was always a stealth price increase if someone added Kinect later on at retail (+$50 over the Kinect SKU).
MS's consistently utterly miserable level of commitment to Kinect software (from reveal tent onwards) shows that it really was just TV control that the execs were interested in.
It's easy to be disappointed that engineers could make something so amazing, and that execs could only see an "Xbox Bing Gold subscription" microphone, but without their hopelessly deluded view on an expensive subscription based machine to play phone-level TV streaming apps, perhaps we would have never seen it at all.
It's easy to be disappointed that engineers could make something so amazing, and that execs could only see an "Xbox Bing Gold subscription" microphone, but without their hopelessly deluded view on an expensive subscription based machine to play phone-level TV streaming apps, perhaps we would have never seen it at all.
RancidLunchmeat
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Agreed. And remember you're talking to somebody who stated previously that as soon as MS announced the unbundling of Kinect that MS wouldn't even make Kinect bundles anymore after the current inventory was sold out. I was wrong on that, as the AC Kinect bundle demonstrated.
But I'm at a loss as to how your theory explains the fact that MS is only dropping the castrated version by $50 and is leaving the One version at its $499 price tag. A $50 drop on both sku's does not inhibit or deter "core gamers" from buying the castrated version. And, if MS really wanted to maximize profits because "people who want Kinect will pay whatever it takes for it", they could get rid of the One version totally and just sell the Kinect as an add on at $140 and make even more money.
How do you explain the fact that MS is only dropping the Kinect-less version $50 if there's no demand for Kinect?
But given general noise surrounding Kinect (or rather, silence), and anecdotal evidence like the Kinectless SKU being ranked 12th top selling in gaming on Amazon and the Kinect SKU doesn't even register in the top 100, it's hard for me to believe that it's significantly in demand.
Sales of XB1 before the Kinect less SKU were dropping fast. MS also don't talk about Kinect SKU's with any bluster. And the Kinect SKU doesn't chart in sales. I'm interpreting this very differently to you.
Not really, we're just looking at different data points. You are focused on the fact that the $499 Kinect version isn't and hasn't been selling and we are agreed on that. I'm looking at what happens when consumers have the choice between a system with and without Kinect and from what I've seen, the overwhelming choice is to get the version with Kinect. I understand this is all anecdotal and may not really be indicative of the entire market. But from Reddit, Slickdeals, Cheapassgamer, Fatwallet, etc.. forums, everybody wants the Kinect bundle. They just absolutely do not want to pay $100 more for it.
I still don't get how that has anything to do with people who buy the Kinect version not buying games at the same rate as those who buy the castrated version.
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RancidLunchmeat
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What? Of course they could have done it with the PS3, but they didn't and it was a major selling point for Sony supporters over the 360. Of course, the experience suffered because Sony didn't have the revenue stream from subscriptions in order to fund infrastructure improvements.
Sure it was "solely an economic decision", but it was one that was only available because MS demonstrated that paid subscriptions that were reinvested in infrastructure provided a superior experience and that there was a market willing to pay for it. To say that multiplayer on the PS4 that now requires a subscription wasn't a reaction to MS and Live is absurd. Of course it was. MS did it first, MS demonstrated that it was profitable and Sony followed suit. Much to the chagrin of Sony fans every where.
What are you talking about? PC gaming VS Console gaming? I guess we should just ignore how those two markets are completely different and why Halo was such a huge phenomenon despite the fact it didn't offer anything different from many previous PC games. And I never said paid social, you are the one that was talking about how paid subscriptions allow infrastructure improvements that improve end user experience, and how that was a "market" condition that was somehow completely isolated and not a reaction to MS Live.
RancidLunchmeat
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Again, this isn't supported by the facts.
What is supported by the facts is that people don't want to pay a $100 premium for it. The demand for Kinect lies somewhere between $0-$100, and we don't yet know where on that continuum it actually is.
Given the choice of a Kinect or Kinect-less version of the One, people will choose the Kinect version. That was borne out over the holidays. The absurd popular narrative that people don't want it because it is "an NSA spy camera" and whatnot, is simply not true. People DO want it, they just don't want to pay $100 for it. The question is: "How much over $0 are they willing to pay for it?" Is Kinect worth $10? $25? $50? $75? We know the market absolutely has refused $100. But we don't know what they will accept.
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