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

[Globalisateur]

Here's the scenario I can see proceeding the upcoming game comparison between PS5 and Scarlett family if taking into account of a 10 TF PS5 ($399), a 12 TF Anaconda ($499) and a 4 - 6 TF Lockhart ($299).
PS5: Offering the best looking exclusives by far since the base line is 10 TF and not chained by a much weaker SKU, all games mostly render at native 1800p, with 4k cbr used a plenty and occasional native 4k titles.
Anaconda: Offering the best looking Multiplatforms, 90% of all games render at native 4k, the rest shares between 1800p, dynamic 4k and 4k cbr. Exclusives while retain pristine native 4k IQ suffer greatly from a 4 - 6 TF Lockhart in terms of sheer graphics quality.
Lockhart: Worst looking and performing on all games, native 1080p - 1440p, using all kinds of dynamic res and checkerboarding too. Games coded for a base 4 - 6 TF console should still look far better than the best of Scorpio tho even at 1080p.

Pick your poison folks.

With 4.2 Tflops they already aim for 4K CBR on all their big exclusive (single player) games (Horizon, God of War, Days gone, Death Stranding, TLOU2).

1800p is around 38% more pixels than 1537p, and with a much more efficient 10tflops GPU (allegedly), I don't see how they could aim for only 1800p in any of their big games for PS5 (4K CBR being roughly native 1537p).

I don't know if they'll aim for native or 4K CBR, but I am pretty sure 4K will be the new 1080p for Sony. Maybe they improve the CBR rendering, particularly in motion (CBR is apparently already pretty good in the last Anthem game compared to native similar res), and an improved CBR could be enough for them, and us. But it's going to be '4K' for them, not 1800p, which is what we have now in some Pro games.

And a 4-6tflops console will be a problem for both Microsoft exclusive games and multiplat games IMO. But at least it's going to be a good thing for Sony games. Comparatively they'll shine even more !

 

[AlNom]

And a 4-6tflops console will be a problem for both Microsoft exclusive games and multiplat games IMO.

?

PS5: Offering the best looking exclusives by far since the base line is 10 TF and not chained by a much weaker SKU, all games mostly render at native 1800p, with 4k cbr used a plenty and occasional native 4k titles.

This doesn't really make a lot of sense since it'll matter what the final output is in terms of flops per pixel. There are factors beyond just power that go into "better" looking anyway, a lot of it being fairly qualitative and the circumstances of a focused development budget.

It's a cute narrative you folks keep bringing up with system wars, but I don't see the relevance to the discussion here, so stop trying to bring down the level of discussion, please. It's beyond irritating after over a decade on a technical site, and I have to imagine you weren't 5 years old when you signed up here.

 

[Deleted member 11852]

If it's a chip for cloud gaming it could make sense. But if it's really a 4TF home console while MS is currently busy convincing the world how much nothing is more important than teraflops... well... it becomes more of a marketing issue. If it's a cloud chip, nobody have to know about it's specs, since nobody is really buying it.

It will also be a marketing issue if Xbox Series X, given it's power, is significantly more expensive than PlayStation 5. Putting all your eggs in one premium egg basket is a tremendous risk. The history of expensive console sales is not good. A budget Series S could counter that.

 

[Karmaprof]

It will also be a marketing issue if Xbox Series X, given it's power, is significantly more expensive than PlayStation 5. Putting all your eggs in one premium egg basket is a tremendous risk. The history of expensive console sales is not good. A budget Series S could counter that.

499 Euro or 599 Euro is not that what i called expensive, the 3DO in Germany was expensive it cost in the 90th around 1200 DM and was a Flop.

 

[Deleted member 11852]

499 Euro or 599 Euro is not that what i called expensive, the 3DO in Germany was expensive it cost in the 90th around 1200 DM and was a Flop.

Sure, and £429 was a pittance to me but relative to the PS4 at £349 it was expensive and relative to the Wii U at £200 and £250 (premium) it was expensive. The basis for comparison here is market the product exists in not the arbitrary financial situation of each individual.

Certainly in the UK, no console selling at £400 or more has ever sold well.

 

[goonergaz]

Sure, and £429 was a pittance to me but relative to the PS4 at £349 it was expensive and relative to the Wii U at £200 and £250 (premium) it was expensive. The basis for comparison here is market the product exists in not the arbitrary financial situation of each individual.

Certainly in the UK, no console selling at £400 or more has ever sold well.

But with inflation £400 will be like £350 (roughly speaking) and we’ll be getting some cutting edge tech this time so worth paying more

 

[BRiT]

But with inflation £400 will be like £350 (roughly speaking) and we’ll be getting some cutting edge tech this time so worth paying more

But with economic impact of the pandemic, some may be far more sensitive to any adjustments to inflation. It really could become a difficult moment to get the outcome one desires. A company could get everything right but at the wrong moment, thus blunting the overall success of their product.

 

[goonergaz]

But with economic impact of the pandemic, some may be far more sensitive to any adjustments to inflation. It really could become a difficult moment to get the outcome one desires. A company could get everything right but at the wrong moment, thus blunting the overall success of their product.

Oh yeah, I get that but I was replying to DSoup saying no console had sold well at £400 and that (in reality) its the same amount.

Either way, if both launch at £400 logic dictates unless there’s no desire for next gen consoles then they will sell ok. And least we forget early adopters are usually those with little care of the actual RRP.

 

[Rangers]

It will also be a marketing issue if Xbox Series X, given it's power, is significantly more expensive than PlayStation 5. Putting all your eggs in one premium egg basket is a tremendous risk. The history of expensive console sales is not good. A budget Series S could counter that.

This seems extremely unlikely based on a quick view. PS5 is likely to have expensive cooling (which will be heavy copper etc, seems unlikely to cost reduce) mitigating any small saving in the SOC or motherboard traces elsewhere. As I've posted before, I think the most likely outcome is they are the same price, with a $50 delta (PS5 cheaper) being IMO the 2nd most likely outcome. The PS5 SSD setup could also be more costly.

If you are talking 449 vs 499 I dont think many will care too much. It's circa 10% premium on an already large expenditure.

 

[Barrabas]

MS and Sony seem to be playing a "wait for the other" regarding price announcement?. In my view it should be fine to just go out with the price the company seems fit. What really is the problem if the other company goes lower and the first company in a later announcement say "we have further looked at the market situation and are proud to announce we have decided to lower the price to xxx"? The negative feelings in the public for this i guess will soon be forgotten?

 

[Jay]

we have further looked at the market situation and are proud to announce we have decided to lower the price to xxx"

The problem with this approach is that it makes it seem like you don't have confidence in your product, and just being reactionary.

Are they both waiting on each other? Probably.
But whats the harm? In the end its not unusual as part of a reveal to do the price last anyway once you've got all your other messaging done and out of the way is the usual order.

 

[RobertR1]

As long as MS match Sony on pricing, they’ll take back the US market comfortably.

They have the superior console. End of story.

UK will likely shift more to a 360 era market share while rest of Europe and Asia remain Sony lands as always.

 

[Deleted member 11852]

But with inflation £400 will be like £350 (roughly speaking) and we’ll be getting some cutting edge tech this time so worth paying more

I'm wholly with you on the inflation issue, by sticking near that the sweet $399 spot consoles have been getting cheaper and cheaper but I don't think many people consciously think fo inflation when it comes to consoles, it feels like a weird blind spot. But..

But with economic impact of the pandemic, some may be far more sensitive to any adjustments to inflation. It really could become a difficult moment to get the outcome one desires. A company could get everything right but at the wrong moment, thus blunting the overall success of their product.

This. Launching even a cheap console this holidays could be tricky depending on how long the coronavirus pandemic goes on for. Even if it subsides, a fair amount of economic damage has been done and I'm sure some of the people impacted were/are prospective console owners. Those plans may change, not to mention that many health experts are predicting a return of coronavirus later in the year.

This seems extremely unlikely based on a quick view. PS5 is likely to have expensive cooling (which will be heavy copper etc, seems unlikely to cost reduce) mitigating any small saving in the SOC or motherboard traces elsewhere.

Launch PS3 was 3.2kg and launch PS4 was 2.8kg, do you really think that 30-70 grams of copper is going to make the console heavy? PS5 running hot is going to require a better, and more expensive, cooling system but let's not go crazy here. The whole cooling system is not going to cost more $15-20 assuming they really splash out.

As I've posted before, I think the most likely outcome is they are the same price, with a $50 delta (PS5 cheaper) being IMO the 2nd most likely outcome. The PS5 SSD setup could also be more costly.

I would be astonished of PS5's SSD solution is more expensive, Sony aren't licensing their smarter six-lane controller and they have less SSD capacity in each device so each unit is cheaper. That said I don't doubt Sony have sourced as much (if not more) solid state memory than Microsoft for the nextgen consoles. Without Sony being labelled arrogant, I think they expect to sell more consoles than Microsoft so will need more storage overall.

 

[PSman1700]

As long as MS match Sony on pricing, they’ll take back the US market comfortably.

They have the superior console. End of story.

UK will likely shift more to a 360 era market share while rest of Europe and Asia remain Sony lands as always.

Most likely yes. Since MS is focussing on games again, they might regain some of the EU market. You never know what will happen though, anything can happen.

 

[milk]

You never know what will happen though, anything can happen.

Bold prediction! What if nothing happens?

 

[Riddlewire]

I find it almost impossible to believe that Microsoft would attempt to sell a console for $100 more when visual differences will be practically imperceptible.
Sure, the measured difference between games might be impressive, but the bulk of consumers aren't going to agonize over Digital Foundry's freeze-frame pixel analyses.

 

[PSman1700]

Bold prediction! What if nothing happens?

Ye maybe they delay everything to holiday 2021

I find it almost impossible to believe that Microsoft would attempt to sell a console for $100 more when visual differences will be practically imperceptible.

Well, they did sell a weaker console, with lesser graphics/performance for $100 more in 2013.

 

[Shifty Geezer]

Well, they did sell a weaker console, with lesser graphics/performance for $100 more in 2013.

With a costly USP they thought would be more valued. If you're going with a straight forward gaming box, I think price parity is fairly important. Certainly if you're not the stronger brand, you'll have to work harder. I wouldn't be surprised if Sony's brand is worth $100 worth of hardware, as it were, so a $400 box from Sony will need a $500 box sold for $400 from MS to match sales. If MS sell a $500 box for $500 and hope the better hardware gives it value, it'll sell significantly worse (not just for being $100 more expensive and past the theoretical "that's expensive" price threshold).

TL;DR - If MS want to make inroads into the wider world with XBSX, they should be priced the same as Sony to pit their better hardware against Sony's stronger brand.

 

[PSman1700]

With a costly USP they thought would be more valued. If you're going with a straight forward gaming box, I think price parity is fairly important. Certainly if you're not the stronger brand, you'll have to work harder. I wouldn't be surprised if Sony's brand is worth $100 worth of hardware, as it were, so a $400 box from Sony will need a $500 box sold for $400 from MS to match sales. If MS sell a $500 box for $500 and hope the better hardware gives it value, it'll sell significantly worse (not just for being $100 more expensive and past the theoretical "that's expensive" price threshold).

TL;DR - If MS want to make inroads into the wider world with XBSX, they should be priced the same as Sony to pit their better hardware against Sony's stronger brand.

That only goes to show how 'great' the One strategy was, it was a weaker console with a less popular brand name, at 100 dollars more with the kinect system that no one wanted. On top of that they didn't focus on gaming (TVTVTV). And that coming from the succesfull 360 they had.

 

[London Geezer]

MS and Sony seem to be playing a "wait for the other" regarding price announcement?. In my view it should be fine to just go out with the price the company seems fit. What really is the problem if the other company goes lower and the first company in a later announcement say "we have further looked at the market situation and are proud to announce we have decided to lower the price to xxx"? The negative feelings in the public for this i guess will soon be forgotten?

I sort of agree. If either of them have a first price that isn’t cutting it, they can easily discount it at any point they see fit. I seem to remember that the PS3 didn’t start selling as expected until it dropped price by quite a bit with the Slim - that’s when I got it, which is saying a lot.