Digitimes.com - 360 Rumour: $100 pricedrop imminent

[aaaaa00]

Could be seen as going in for the kill....

Yup, just turning the screws even tighter on Sony.

Cause even if it hurts MS to drop the price on the 360, it'll hurt Sony even more on the PS3 once the first million "early adopters" have got theirs and normal people start look at the $499/$599 price tag and see the competition going for $200/$300 less.

Presuming it happens at all -- that article isn't exactly credible.

 

[bRoNx]

Even if that happens, how much would M$ be losing per console then?

I thought they dropped the original XBOX due to $$$ being lost, so it's kinda backwards to think that all of a sudden they're happy to lose all that $$$ now?

I agree that it'll put the pressure on SONY, but what happens if the PS3 continues to sell well at it's higher price range, and the 360 continues to leak $$$ at it's lower price?

Welcome the next next gen?

 

[aaaaa00]

I thought they dropped the original XBOX due to $$$ being lost, so it's kinda backwards to think that all of a sudden they're happy to lose all that $$$ now?

It's not that MS doesn't want to take losses, it's that they don't want to take futile losses.

They dropped the original xbox because those losses were futile, since the xbox 1 had no hope of catching up to or surpassing the PS2's installed base before the PS3 came out.

Barring money hats, developers will tend to spend the most effort on the console with the largest installed base, because that's where they can make the most money. It becomes a self-perpetuating cycle: more installed base -> more developer support -> more AAA games -> more installed base -> more developer support -> more AAA games -> more installed base ...

The first console to reach this critical mass (~10 million installed base) and enter this cycle generally has won all the previous generations. Advantage builds on advantage, and that console then pulls away from the rest of the pack.

I'd imagine that if MS believes victory this generation is possible, they will be willing to take large losses to kick start this self-perpetuating cycle as quickly as possible.

This is of course not to say one way or another whether a price cut will happen -- I think the Digitimes article is not credible, since it's old and from way back in July.

 

[Inane_Dork]

Look, its very simple. Cheaper price = more sales.

Cheaper price can mean a lot more than just more sales. Consumer perception might backfire and label the 360 as inferior because it's so much cheaper. Slashing price by that much sends a pretty desperate message. That can be pretty damaging long-term if the perception is that the 360 is a half-generation behind for 4-5 years of its life. Sony would love nothing more than to make that happen.

Historically all consoles have done very well in sales during the holidays after price drops REGARDLESS of what the competitions prices were.

MS doesn't need a price drop to sell a lot of consoles. Maybe you think they do, but I strongly disagree. It's not a perfect analogy, but recall what PS2 sales figures were in Q4 2001. They weren't bad at all and they had no price drop.

Totally disagree. $400 is much more expensive than $300, some people will only buy at that price, it also brings the core to the sweet spot for mainstream consumers which is $199. Everything is not relative to PS3.

If they're waiting for a high-end console, MS will beat Sony to $200/$300 no question. Why rush it? Wait for the opportune moment.

They will sell more consoles at $300 than at $400, that's really the bottom line.

Sure, but is it worth it? Are there better ways to increase sales that don't plummet profit?

I think there are, and a price drop would in no way affect PS3 or Wii sales. So why not wait for a more opportune time to attack? Wait till there's really something to be gained by a price drop.

 

[SPM]

Microsoft does seem to be in some kind of a panic here with regard to the release of the PS3 (and perhaps Wii), what with all the HD add-on, price cuts, HDMI and 1080p announcements. It is all aimed trying to justify an Xbox 360 purchase vis a vis PS3. I am surprised that they don't seem to think that XBox 360 will sell at it's current price, and cutting the price now makes no sense since PS3 supply is limited at the moment due to the blue laser diode shartage, so Sony's PS3 sales aren't going to be impacted one iota at the moment.

 

[pipo]

The story is from July 26th.

Not only that, but I'm pretty sure we had a thread here on it too.

 

[aaaaa00]

It is all aimed trying to justify an Xbox 360 purchase vis a vis PS3. I am surprised that they don't seem to think that XBox 360 will sell at it's current price, and cutting the price now makes no sense since PS3 supply is limited at the moment due to the blue laser diode shartage, so Sony's PS3 sales aren't going to be impacted one iota at the moment.

MS doesn't care about affecting the PS3 launch, since they're not going to be able to anyway.

This Christmas, they're not going after the hardcore "early adopters" that are going to buy a PS3 no matter what, they're after the mainstream that would have never gotten a PS3 at launch anyway.

 

[SPM]

MS doesn't care about affecting the PS3 launch, since they're not going to be able to anyway.

This Christmas, they're not going after the hardcore "early adopters" that are going to buy a PS3 no matter what, they're after the mainstream that would have never gotten a PS3 at launch anyway.

But do they suddenly need to cut the XBox360 price, announce an HD-DVD add-on, 1080p, HDMI - all seemingly aimed at the PS3 and Wii threat - to do that? Microsoft certainly seems to think so.

 

[Rangers]

But do they suddenly need to cut the XBox360 price, announce an HD-DVD add-on, 1080p, HDMI - all seemingly aimed at the PS3 and Wii threat - to do that? Microsoft certainly seems to think so.

Well, all of that doesn't take much effort/was already in the works except the price cut, and I wont be convinced that is real until it's announced.

I also think a $50 price cut might be possible.
________
ANGELcaliente

 

[AzBat]

Well, all of that doesn't take much effort/was already in the works except the price cut, and I wont be convinced that is real until it's announced.

I also think a $50 price cut might be possible.

I also think a smaller price cut like $50 is more likely. Or how about $40? Would make it $360. Anyway, a $50 price cut makes much more sense especially if Microsoft want to sell a HD-DVD add-on bundle priced cheaper than the $600 PS3. In fact, without a bigger HDD or built-in HDMI Microsoft might see that they should be competing with the $500 PS3 instead and should be pricing the Premium + HD-DVD bundle at $500. That would be a big announcement.

Personally, I'd rather Microsoft add a 60GB HDD and HDMI to the Premium package and sell it at $400. Then make a $550 bundle including the HD-DVD add-on. Then sell the $300 Core package with a free a 20GB HDD. This allows Microsoft to sell a system at a variety of price points. I'd buy that Core package.

BTW, Seagate announced back in June that they added 60GB and 80GB capacities to their LD25 series. The same series used in the Xbox 360. Unfortunately, they also dated the shipping of the newer models as "first calendar quarter of 2007". Maybe Microsoft will announce a different vendor for the hard drive and get some larger capacities? I think Fujitsu is shipping 200GB on their 2.5-inch models.

Tommy McClain

 

[scooby_dooby]

Cheaper price can mean a lot more than just more sales. Consumer perception might backfire and label the 360 as inferior because it's so much cheaper. Slashing price by that much sends a pretty desperate message. That can be pretty damaging long-term if the perception is that the 360 is a half-generation behind for 4-5 years of its life. Sony would love nothing more than to make that happen.

You're vastly exagerating the effect this would have. X360 is in no danger of being undervalued, PS3 just doesn't bring enough to the table.

I don't know how you can think think Sony would love MS to hit the $199 pricepoint before they've even gotten below $500. Don't forget how amazing the 360 games are going to look that come out between now and Q1 2007.

MS doesn't need a price drop to sell a lot of consoles. Maybe you think they do, but I strongly disagree. It's not a perfect analogy, but recall what PS2 sales figures were in Q4 2001. They weren't bad at all and they had no price drop.

Of course they do. They are 100% demand limited right now. The sales to date are mediocre at best.

If they're waiting for a high-end console, MS will beat Sony to $200/$300 no question. Why rush it? Wait for the opportune moment.

Sure, but is it worth it? Are there better ways to increase sales that don't plummet profit?

I think there are, and a price drop would in no way affect PS3 or Wii sales. So why not wait for a more opportune time to attack? Wait till there's really something to be gained by a price drop.

A holiday season with essentially no competition is not an opportune time to increase your install base lead? An extra 1-2million sold possibly? Maybe 2-3million over the next 6 months?

It is opportune IMO as PS3 will be nearly impossible to find, and it's the Holidays people want to buy something. Sure there' s the Wii, but alot of people want a signifigant step up from their 6 year old systems.

I'm sorta playin devil's advocate here, I'm not sure they need a pricedrop, but I think it would only have positive effects in the long term. People saying they have no reason to drop are wrong, a only ~6 million installed WW after 10 months is reason enough.

 

[Johnny Awesome]

I think MS can wait until March '07 to drop price by $100. I think they are far more likely to bundle games and accessories instead if they want to increase value for the customer.

 

[hey69]

large chains here sell already the xbox360 premium at 369-379 or a bundles like
premium+extra wireless controller+playchargekit for 419 euro

in europe , i dont think ms has reason for pricedrop , but maybe they will to accelerate the sale instead of counterreacting Sony.

 

[SugarCoat]

Cheaper price can mean a lot more than just more sales. Consumer perception might backfire and label the 360 as inferior because it's so much cheaper. Slashing price by that much sends a pretty desperate message. That can be pretty damaging long-term if the perception is that the 360 is a half-generation behind for 4-5 years of its life. Sony would love nothing more than to make that happen.

Yes maybe the spoiled idiot with tons and tons of money to burn would think that the more expensive a console is the better it is, but for the majority of people they just have a budget that they work around. I'm sure thats not over your head and you can understand and recognize that. You keep using examples of how the minority may see the Xbox360 if it drops its price when really that doesnt matter at all in the larger scheme. If 400 was too much for Joe Average yesterday, its not all of a sudden going to look fantastic if they bundle a game or some Xbox Live ploy he doesnt want with it while the price remains the same. If its too much its too much.

MS doesn't need a price drop to sell a lot of consoles. Maybe you think they do, but I strongly disagree. It's not a perfect analogy, but recall what PS2 sales figures were in Q4 2001. They weren't bad at all and they had no price drop.

Incorrect. Sony reduced the price of the Playstation 2 twice in 2001 for Japanese consumers and once in 2001 for most of Europe. America isnt the world and while it makes up a large percent of sales per year it certainly is far from all.

 

[TrungGap]

Last xmas, 360 was in short supply...and luanch systems are usually pick up by hardcore gamers that is willing to pay for higher price. Once that is oout of the way, regardless if PS3 launch this xmas or not, MS needs to capture non-hardcore gamers.

Non-hardcore gamers has the option of getting a 360 at a relatively cheaper price without all the *extra stuff*. Non-hardcore gamers with interests in video have the option of picking up a HD-DVD addon. What they're trying to do is capitalize on the holiday demands. By having more options and attracting non-hardcore, they can expand their base. PS3 is in no position to steal any sales from MS, so why should they be in panic mode?

Now, with PS3 in limited supply, it means some people will not want to hold out...and might opt for a 360 in place of PS3. That's just an extra bonus. To really capture PS3 ******s, they have to an excellent line of games, which IMO they're doing just fine. I'm sure they're spending a bit of cash to secure it, but hey they can afford it.

 

[Chris123234]

Sure, but is it worth it? Are there better ways to increase sales that don't plummet profit?

I think there are, and a price drop would in no way affect PS3 or Wii sales. So why not wait for a more opportune time to attack? Wait till there's really something to be gained by a price drop.

So a $199 or even $249 Base Xbox 360 wouldnt cut into the $249 Wii sales? Or did they do away with that sku?