Baseless Next Generation Rumors with no Technical Merits [post E3 2019, pre GDC 2020] [XBSX, PS5]

[Deleted member 13524]

Lower profits on selling hardware lasts a couple of years. Significantly slower baseline hardware lasts an entire generation, and is able to hurt software sales much more than making money on the hardware ever could.

Sony didn't use their enormous mindshare advantage from the PS1 generation to cut back on the PS2 hardware. And then they didn't use their enormous mindshare advantage from the PS2 generation to cut back on the PS3 hardware.



But somehow Sony will now use their mindshare advantage from the PS4 generation to cut back on the PS5 hardware price and undercut their significantly weaker competition in price, despite them stating the exact opposite in their investor presentations and their main source of income being software and not hardware.
The mental gymnastics people use to justify and explain religious beliefs is astounding.

 

[PSman1700]

Lower profits on selling hardware lasts a couple of years. Significantly slower baseline hardware lasts an entire generation, and is able to hurt software sales much more than making money on the hardware ever could.

Most likely sony is aware that the casual market (over 90% ?) doesnt care about specs, if they can reduce their loss on every box sold, or even earn on it, then why not? Also, how much will software sales be hurt if theres a 9 vs 12TF difference? For exclusives it wont matter, and i doubt the avarage consumer is buying their games based on pixel count or extra settings.

Sony didn't use their enormous mindshare advantage from the PS1 generation to cut back on the PS2 hardware. And then they didn't use their enormous mindshare advantage from the PS2 generation to cut back on the PS3 hardware.

In the case of PS2, they used totally exotic own-developed hardware, flexible but not fastest hw. In the case of PS3, the cell was 'in-house', but the GPU was a generation behind what was available at the time, significantly, which wasnt their own exotic design.

But somehow Sony will now use their mindshare advantage from the PS4 generation to cut back on the PS5 hardware price and undercut their significantly weaker competition in price, despite them stating the exact opposite in their investor presentations and their main source of income being software and not hardware.

Coming from the PS2 gen, where the xb sold 24m vs ps2 155m, having a expensive console (PS3) almost sunk Sony. Just because a gen was a huge success doesnt mean Sony wants to subsidize their hardware again, as that didnt really turn out great last time.

 

[Nesh]

That's really not Economics 101..
Pricing your products down diminishes your brand value. Diminishing your brand value gives you lower mindshare. Lower mindshare means lower sales.
Increasing your price may actually get you higher sales.
What matters is if enough people concede that your value offer is worth the price you ask for.

The demand in general has negative correlation between price and units sold.
What you describe is not a 101 rule. If the product is sold as a luxurious niche product it can have a higher price with comparatively insignificant reductions in demand for the specific target market.
A Lambo was designed from the start as a luxury product. It doesn't compete with Toyota or Mazda's market share but it competes with Ferrari. Also luxury product with less market share than a Mazda. Reducing the price too much might have a negative effect on the target market (the super rich that want to boast about having a luxurious expensive car) but it might generate new sales from a market with less income. Or it may not reach that level of price where it can generate those sales due to the larger inequality gap.
In the case of console it is a mainstream product and it needs to be mainstream to be able to sell as many software as possible. It needs to be priced attractively. Increasing the price will not increase sales by any means, unless it is accommodated with something that increases the perception of value. Even then, and even if the price is excused by the value, it shouldnt fall in the territory where it is attractive for and purchased by the wealthier but transforms itself into a wishful product for those with not enough income.

 

[Picao84]

The demand in general has negative correlation between price and units sold.
What you describe is not a 101 rule. If the product is sold as a luxurious niche product it can have a higher price with comparatively insignificant reductions in demand for the specific target market.
A Lambo was designed from the start as a luxury product. It doesn't compete with Toyota or Mazda's market share but it competes with Ferrari. Also luxury product with less market share than a Mazda. Reducing the price too much might have a negative effect on the target market (the super rich that want to boast about having a luxurious expensive car) but it might generate new sales from a market with less income. Or it may not reach that level of price where it can generate those sales due to the larger inequality gap.
In the case of console it is a mainstream product and it needs to be mainstream to be able to sell as many software as possible. It needs to be priced attractively. Increasing the price will not increase sales by any means, unless it is accommodated with something that increases the perception of value. Even then, and even if the price is excused by the value, it shouldnt fall in the territory where it is attractive for and purchased by the wealthier but transforms itself into a wishful product for those with not enough income.

Yes, what you said is actually Economy 101, basic rules of Supply and Demand. What Totten is saying the exception to the rule indeed.

Calling one side religious is a bit rich. On the absence of hard official data this discussion is no more based on belief than religion itself. No one here commands the upper ground, no one.

 

[fehu]

It's credibly ugly tho

 

[Shifty Geezer]

That's really not Economics 101..

That's not basic economics. Basic economics isn't "charge more to sell more".

It's completely proven.

I beg to differ with PS3 being a excellent test case. No console has offered more value than PS3. It included a bleeding-edge BluRay player to compete with standalone players costing far more, in a box that stuffed something like $800 of hardware into a $600 machine. On the back of PS2's runaway popularity, consumer and PS fans were offered the best value possible, and yet the buying public shunned it as too expensive.

$500 of hardware sold for $500? How can that possibly sell faster than PS4 did? I think the only product that's manage that is iThing which has a brand strength all of its own. Seeing PS4's sales downturn, the brand has lost steam at its current price. That does not point me to a healthy new round of hardware selling even faster at an even higher price.

 

[Xbat]

I beg to differ with PS3 being a excellent test case. No console has offered more value than PS3. It included a bleeding-edge BluRay player to compete with standalone players costing far more, in a box that stuffed something like $800 of hardware into a $600 machine. On the back of PS2's runaway popularity, consumer and PS fans were offered the best value possible, and yet the buying public shunned it as too expensive.

It's not that straight forward. The Xbox 360 came out earlier and was performing better and much cheaper so it must of taken quite a large portion of the market from PlayStation.

People who buy consoles at launch are the hardcore and it's all about the games for the hardcore. I think if the PS3 came out at the same time as the 360 and Nvidia didn't deliver a turd the sales probably would of been much different to what they were even with the price difference.

So what I'm saying is the price probably played a part but it wasn't the only factor.

 

[Deleted member 13524]

In the case of console it is a mainstream product and it needs to be mainstream to be able to sell as many software as possible. It needs to be priced attractively. Increasing the price will not increase sales by any means, unless it is accommodated with something that increases the perception of value. Even then, and even if the price is excused by the value, it shouldnt fall in the territory where it is attractive for and purchased by the wealthier but transforms itself into a wishful product for those with not enough income.

While true, none of this represents any kind of valid data or clues that point to the PS5 having its price set to $399. A price that is lower than its predecessor when adjusted by inflation, which would mean Sony trying to use lower price as their platform's value, which is the complete opposite of the marketing plan they showed their investors.

That's not basic economics. Basic economics isn't "charge more to sell more".

I doubt any college that takes itself seriously would deploy an entire 1st-year semester-long course to teach their students that "lower price = more units sold".
We'll just disagree on what a "Ecnomics 101" class would teach.

I beg to differ with PS3 being a excellent test case. No console has offered more value than PS3. It included a bleeding-edge BluRay player to compete with standalone players costing far more, in a box that stuffed something like $800 of hardware into a $600 machine. On the back of PS2's runaway popularity, consumer and PS fans were offered the best value possible, and yet the buying public shunned it as too expensive.

Why are you pushing to use 13 year-old sales numbers of a console launched almost 2 generations ago as test case, when I just presented numbers for holidays 2019 which are obviously much more valid?

Even stranger that you're using the PS3 that suffered a >1 year delay from the X360 (15 months on PAL regions!). This doesn't make much sense. Do you think the PS5 is being postponed to holidays 2021?

Seeing PS4's sales downturn, the brand has lost steam at its current price.

The lost steam comment seems purely speculative.
Hardware sales slowing down 6-7 years after release doesn't mean the brand has lost steam. It simply means the hardware is reaching is total target market.

The brand losing steam would have to come with evidence of slower software sales, a data which you probably can't provide because Sony has been posting increasing profits on software sales YoY.

 

[iroboto]

I doubt any college that takes itself seriously would deploy an entire 1st-year semester-long course to teach their students that "lower price = more units sold".
We'll just disagree on what a "Ecnomics 101" class would teach.

Well, I mean. common.
it covers margins, taxes, revenue etc. It's a bit more nuanced than just a price/demand curve with optimum price points.

Just reading through what was written though, what you are describing is the effect of substitute goods, not the price/demand elasticity.
Consoles are definitely elastic products, the more they cost the less that is purchased.
Something like gas is inelastic, the more they cost people still have to buy it.

I would say you're actually been trying to prove substitute products, and the reason why Sony or Apple can command higher prices is not because of brand, but because people believe that there is no substitute for their product.

If iphones and ipads and PS4s suddenly dropped in price by 70%, I'd be first in line to buy the top of the line models. It wouldn't devalue shit for me.

 

[Shifty Geezer]

Why are you pushing to use 13 year-old sales numbers of a console launched almost 2 generations ago as test case, when I just presented numbers for holidays 2019 which are obviously much more valid?

I have no idea what your argument is with your numbers. You just listed the price of products; we've no idea how any of those products actually sold. Is your argument that a PS4Pro at $250 would have sold worse? That if Sony had increased the price to $500, it be seen as more luxury and desirable and sold more? My Economics 101 class says had the PS4Pro been priced cheaper, it'd have sold more. Same for every product there as long as it's not seen as a turkey.

Even stranger that you're using the PS3 that suffered a >1 year delay from the X360 (15 months on PAL regions!). This doesn't make much sense. Do you think the PS5 is being postponed to holidays 2021?

Being delayed makes no difference. Look exclusively at PS3's sales performance and how it changed with the price drop.

$800 of value in a $600 box - no takers
$800 of value in a $500 - now you're starting to hit the mainstream price-point of your consumers given the hardware value of the box.

PS4 - $400 hardware in a $400 box, far worse value than PS3 in absolute terms, selling gangbusters because it's the mainstream sales price
Or your example XBone. Launch price of $500; really not that interested. Drop it to $400 and sales suddenly pick up.

 

[AlphaWolf]

This is true, although I don't think a couple of DDR4 chips will increase the PCB cost for more than handful of cents, nor will the increment of an automated test for quality control.

Logistics, software etc...

It's not me who's telling.


We either get:
- Smaller game sizes with equally big worlds
- Smaller game sizes and bigger worlds
- Same game sizes and bigger worlds

The idea of larger game sizes isn't even being considered by Cerny.

Which game is he developing?

Game sizes were never going to grow as much as they have in past gens, but I have no doubt they will grow as the generation goes on. There are going to be developers wanting to push more assets to make their 4k title the shiniest.

And how does 12TF of compute mean the game sizes will be larger? 12 TFLOPs will be used to process compute, vertex and pixel shaders. Those are all relatively small pieces of code in games.

What takes the most space nowadays are texture size and shadow maps, as geometry also takes a much smaller space in comparison.
Texture size at 4K*4K already brings very diminishing returns, let alone 8K*8K. You can try 4K vs. 8K texture packs on e.g. Skyrim and see that for yourself.
Shadow maps on the big AAA games (the ones that actually ship with large file sizes) may end up getting rarely used, now that both consoles can use ray traced shadows.

Is 1080p going to be the target res?

Just because the consoles have ray tracing hardware, it would be quite a stretch to say that everything that can be ray traced will be ray traced.

 

[Scott_Arm]

While I'm not a TF whore any more I still don't betray my roots, it's always gonna be visuals over fps for me no matter what

Not after my extensive re-programming.

 

[PSman1700]

Game sizes were never going to grow as much as they have in past gens, but I have no doubt they will grow as the generation goes on. There are going to be developers wanting to push more assets to make their 4k title the shiniest.

Game install sizes aren't going to decrease atleast, not going to happen. Maybe they don't get larger, but i doubt that. Install sizes will probably increase over the years. 1TB is just way too small amount, people will need (fast) external solutions.

 

[Mitchings]

If XSX is ~$499, I honestly don't think $399 vs $499 for the PS5 will make a meaningful difference to Sony in that first 12-18 mths.

$500+ however would be a different matter..

Perhaps $449 would be a nice way to hedge their bets.

 

[turkey]

I want to start a Rumor so they can hopefully implement it.

XsX to have co-op back compact mode. Console will run 2 copies of and Xbox One series game in X mode as split screen. We can finally play Halo 5 split screen as we should have from the outset, as well as many other current gen games.

Couch gamers unite and let them know we need this!

 

[ultragpu]

Here's a new multiplatform crossgen title from Square Enix called Outrider.

Looks kinda weak, got last gen lighting, low poly assets all over the place. Hell I was more impressed with their Marvel's Avengers new trailer.

 

[iroboto]

they look like helmets and designs pulled right out of destiny.

hunter left, warlock middle, ... the one on the right looks like Jason.

 

[Rangers]

I see some of that old game Army of Two with the hockey masks, gow, and Destiny.

And yeah doesn't look next gen.

 

[snc]

Btw does anybody know the bom of ps4 pro and xox ? I know that ps4 was 381$. Edit sorry not this topic

 

[Nesh]

I see some of that old game Army of Two with the hockey masks, gow, and Destiny.

And yeah doesn't look next gen.

Nice assets but yest it lacks the next gen punch.