Well if MS started selling the 360 for $1 then they'd probably sell even more.
But why wouldn't MS do that? I think when we look at extremes, we come back to realizing that there are several cross-currents in the calculus. For my part, I don't expect the Arcade to go down to $149 anytime soon.
It may, I dont know, MS pricing is always interesting to me because they have so many SKU's. I'm not sure where they go from here, how much cheaper can Arcade get? They've reinvented themselves many times already SKU wise. For example, at one point I was doubtful Arcade/Core would ever be accepted by the populous because of no HDD, there was no indication to me it would be. Yet they pulled it off with the 199 point.
Going forward, one problem is the prices on the higher skus get low enough it seems to me Arcade could be marginalized again, making a defacto price hike again. Say Pro goes to 249..it seems consumers would say why not get pro, and then they might say, why not get 299 PS3 (at that time hypothetically)?
Basically it's possible MS may shift the sales burden towards any give sku depending on price structure, with various attendant affects. Will they shift it back to Pro or even Elite next time? What if the next structure looks like $169/$249/$349? $249 is the obvious choice. 249 is a defacto price hike if 199 is the best selling sku today..
I'm skeptical MS can get Arcade down to 149 with next cut (which I assume in Fall). I'm guessing 169 or 179. I believe Arcade is losing money, because a recent MS interview described that they chose to "invest" in getting Arcade at 199 (among other things). That term suggests it's a money loser.
My pet idea for the next round from MS is to eliminate the Elite SKU, it only complicates things. Actually do this by dropping the pro. Have two SKU's, Elite and Arcade, priced at 169/269. Then you figure the ASP would be maybe like 240 out of that combo, because I'm assuming Elite would be the dominant SKU at those prices. But lets say the ASP ends up midway, 220. Well the current ASP is 270 according to NPD, so it's a 50 cut. I think people would flock to the idea of an former "Elite" being so "cheap". But then, people might see a potential PS3 at 299, and perhaps it would really hurt 360 sales with this 169/269 structure. It's tough to say.
Basically the multi-SKU structure is a delicate balancing act, you dont want to in essence make the higher end SKU's too relatively attractive, because then you have a defacto price hike. This is one reason I think the Elite is in a good place right now. It's highly marginalized. It's there to skim a few bucks from well off people for whom price is little object, which was the original intent imo. But if you sweetened the pot by adding say, wi-fi, and a game, ironically you risk making it too attractive, you risk Joe Blow saying, "well if I get a 360 it has to be the Elite or nothing because thats the best deal, so I'll not get one or get a PS3 because the Elite is rather expensive"
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