How to sell next-gen consoles, Marketing, Positioning, and Pricing [2020]

[Tkumpathenurple]

If they made every digital PS5 purchase playable via streaming for PS+ subscribers, then HFW & Spider-Man can sell many more copies than the quantity of shipped PS5's

 

[BRiT]

Or they could launch on PC and sell more copies of the game than the console...

 

[iroboto]

Selling a lot of consoles has never been a problem for Sony. They sold 90m PS3s against stiff competition following an utterly toxic launch and rough first two years.

Indeed, but aren't we only discussing launch before we discuss LTE?

We've heard knowledgable folks say Sony will not be producing as many PS5 consoles as you would expect for a launch, so I expect PS5 will sell out and probably be sold out for a solid 3-4 weeks. Now in terms of numbers of games sold, this is unpredictable because this launch is different in that you can buy a PS5 and play your PS4 games better than ever so there is less need to buy new games to enjoy your new console. I can imagine PS5 appealing to people who loathe load-times but are not that interested in the launch games.

The dynamic of the launch console customer for whom a launch console will appeal is likely to be different this generation.

I expect to be out of stock for longer. IIRC after the pre-orders stores were out of stock largely for 3-4 weeks. Then after that, out of stock the instant it came in for the next 6 months.

Launch games never sell well because the launch market is tiny. But I'm not seeing the relavenace? The thread is about selling consoles not launch games. You obviously want to sell launch games but good launch games will sell for years as new owners adopt a platform.

I guess for me, seeing all these major titles, as being launch titles, seems a bit unfair to their success. Should they have dropped these titles when the platform was super mature, they'd sell millions day 1. But now they can only sell, a million. If you understand my point.

But with respect to this thread, indeed, these games are being positioned not to be super sellers, but console sellers.

 

[Shifty Geezer]

Super Mario 64...

 

[Deleted member 11852]

Indeed, but aren't we only discussing launch before we discuss LTE?

LTE?

I expect to be out of stock for longer. IIRC after the pre-orders stores were out of stock largely for 3-4 weeks. Then after that, out of stock the instant it came in for the next 6 months.

Yes, 3-4 weeks is the typical TSMC fab run. So stock is replenished every few weeks. They'll never be out of stock for six months.

 

[London Geezer]

The challenge here for Sony is that views don't translate into sales.
Like they've got this incredible lineup for launch right.
So what's the most they can sell?
The most that they can sell even at 100% attach rate is directly proportional to the number of consoles they can sell.
That directly sort of ties software sales to the price point of PS5. This will be interesting to see how software moves here.

I know Spiderman sold 14 million or so. But in order for MM to sell 14M, it's gonna be an insane amount of PS5 selling for the first year. That price point will really determine the success here for both H2 and MM.

Whatever they sell, we all know that they will sell as many PS5 as they can produce.

 

[RDGoodla]

Seeing all the leaked prices, it seems:


PS5 1.65TB $599
PS5 825GB $499
PS5 825GB Digital $399


If we consider Bloomberg said PS5 BOM $450, then the above price seems certain and probably no further price cut
at launch.

 

[iroboto]

LTE?


Yes, 3-4 weeks is the typical TSMC fab run. So stock is replenished every few weeks. They'll never be out of stock for six months.

sorry LTS. lol life time sales.
Replenished and sold out!
I remember how hard people were fighting to get one, people lining up each day. In hope the stock would arrive.

 

[Shifty Geezer]

I remember how hard people were fighting to get one, people lining up each day.

they'll definitely be lining up to get PS5. Standing 2 metres apart!

 

[Jay]

But with respect to this thread, indeed, these games are being positioned not to be super sellers, but console sellers.

And even with consoles selling out, momentum and being the console that is talked about counts for a huge amount.

Momentum can drop of comparatively very quickly, remember early days XO seemed to be doing ok. So you do want those games pretty early also.
Be interesting what the attach rate for those games will be, as early adopters may be the ones more likely to buy those titles anyway. Obviously not saying going to sell 14m of the bat.

 

[Deleted member 7537]

I wonder when we will start to see ads for next gen console, last (current) get were very good overall.

.
.
.
...

This is how you sell a processor Intel!

GOW Ad was pretty good as well.

 

[DuckThor Evil]

Yes, 3-4 weeks is the typical TSMC fab run. So stock is replenished every few weeks. They'll never be out of stock for six months.

I think it takes quite a bit longer than that for a chip to be finished at a fab, but it's a multistage process (to put it mildly) and wafer starts happen much more frequently, they'll probably get finished chips ready to ship every day once the production is up and running.

 

[Deleted member 11852]

I think it takes quite a bit longer than that for a chip to be finished at a fab, but it's a multistage process (to put it mildly) and wafer starts happen much more frequently, they'll probably get finished chips ready to ship every day once the production is up and running.

It's not about about how long an individual chip, it's about the product line and how often chips leave in batches. For Apple, TSMC ship weekly. Sony and Microsoft don't need this, or rather it's not economical to do so.

 

[DuckThor Evil]

It's not about about how long an individual chip, it's about the product line and how often chips leave in batches. For Apple, TSMC ship weekly. Sony and Microsoft don't need this, or rather it's not economical to do so.

Yeah I kind of missed the context what you guys were talking about, shortages in the stores and what not. Regardless I don't know how often TSMC ships console APUs, but it shouldn't matter all that much vs actual quantity. The factory where they assemble the units should have a steady supply of chips and inventory of all parts and be able to produce a set amount of units per shift, day and month constantly without pauses. The shortages in stores are caused by demand that eats the initial stock pile of built units and exceeds the continuous production capacity, then you are just mainly waiting for the cargo ships to arrive with new units and possibly see them vanish quickly until the demand settles down or production capacity is increased.

 

[Deleted member 11852]

The factory where they assemble the units should have a steady supply of chips and inventory of all parts and be able to produce a set amount of units per shift, day and month constantly without pauses.

I'm drifting dangerously close into NDA territory from a previous job here. Fab operations can be quite complex for low volume customers and I include Sony and Microsoft in this. There are a number of significant and separate stages that the chips go through and they are rarely linearly sequential. Ignoring the actual production of the wafers themselves, but beginning with their preparation, Stage 1 may take two weeks to output the next three months worth of items, after which equipment used in stage 1 is re-purposed to produce items for another customer. Stages 2 and 3 may work roughly equally and work through three months worth of stage 1 items, processing perhaps 8% of that stage 1 store weekly. Before the stage 1 store depleted, stage 1 will begin again on the next 3 months worth - this is why it's sometimes very slow to react to sudden increased demand.

Later stages may initially be even slower than earlier stages, anything regarding testing and final qualification usually will and while you won't test all chips (you might, but you probably won't), you will heavily sample each batch, likely starting testing double-digit figures - and this fall/rise over time as confidence on manufacturing changes. It's very unusual for this multistage pipeline to be equal start to finish. Fabs can do that, with Apple they're literally pump through ICs with stage 1 pumping into stages 2 and 3 (which are 'wider') than low-volume customers.

If this all sounds complicated, these arrangements often shifts node to node and process to process.

 

[DuckThor Evil]

By factory "where they assemble the units" I meant Foxconn, Flextronics etc. They are not going to suddenly run out of chips, but have a ton of other parts lying around. Unless something drastic happens, they should have everything under control and have proper inventory management of parts and fairly regular production schedules/volumes planned ahead of time, but yeah change in demand will take quite a bit of time to fully adjust manufacturing.

I've also worked few years in clean room environment with silicon wafer manufacturing in a few different stages of the process, but only as a low"grunt" though

 

[rumaki]

I can't wrap my head around the idea of paying $600 for a console of any kind. I mean it's not even a hardship financially it's like I just have this mental barrier that would do me from doing so.

 

[PSman1700]

Get a second job

https://forum.beyond3d.com/threads/would-you-work-more-hours-to-afford-a-ps3.19935/

Earn that thing. (Abit for fun, ofc, those where great times in a way)

 

[rumaki]

Get a second job

I don't need one. Like I said earlier it's not the fact of paying that price. I spend much much more on other hobbies

 

[London Geezer]

Value vs Price. If you don't see the value in spending your money in a console, then there's no 'second job' that will help, as the issue it not about Price, but about Value.