NPD April 2007

mrcorbo said:
Technically, on a weekly basis 360 sales were slightly up from last month at least. Remembering this was a 4 week month vs. last month's 5 weeks.

I'm still a supporter of the theory that MS isn't going to push for higher sales until they can fix their hardware reliability issues.
Click to expand...

I agree completely with this. They NEED the 65nm shrink to solve the overheating problems. There's no point in selling an extra 500,000 potential problems a few months early when they can wait until the early Fall when the technology is ready. Besides, from a PR perspective it's probably much better for MS to say: "We moved to 65nm and now we are reducing the price of the console" than to say "Wow, our sales are dropping, so we had to reduce the price."
 
Sis said:
Then again, I don't think the cost difference to Sony is only $30 bucks, but that's a fruitless debate given information we have. And in the end, it's rather pointless: people don't buy individual components of a system; they buy the whole thing, so the whole being the sum of it's parts. In this case, every little thing adds up. You could go to each component and say, "That was only a $15 premium--that's a great deal! And that was only an extra $25, and they get wireless built in! What a steal!" and then at the end you have a subsidized $600 dollar system that on paper should be a great deal but that consumers don't seem to see it as so.
Click to expand...

This is a good point. Much like the cost of the hard-drive to MS was not the real reason for losses on the original Xbox, since the drives were only about $20, the eventual cost of including BR will only be marginal. It's the fact that Sony decided to not only include BR, but every other bell and whistle into the PS3 that is making a very expensive machine.

Consumers are probably willing to pay $30 for BR long term, but not $600 for a PS3.
 
Johnny Awesome said:
This is a good point. Much like the cost of the hard-drive to MS was not the real reason for losses on the original Xbox, since the drives were only about $20, the eventual cost of including BR will only be marginal. It's the fact that Sony decided to not only include BR, but every other bell and whistle into the PS3 that is making a very expensive machine.

Consumers are probably willing to pay $30 for BR long term, but not $600 for a PS3.
Click to expand...
I doubt $20 was the initial cost the HDD for the original XBox. Moreover, it was a big reason that XBox was huge/ugly and could never have a slick form factor like the slimline PS2. It was a big drag on XBox profitability, and I don't see how you could underestimate it.

Similarly, BR is surely not a marginal cost right now. Even more damaging is how it delayed the launch of the PS3 (or at least we think so). I really think XB360 would not have anywhere near its current success if PS3 launched earlier.

Anyway, I'll agree with your last paragraph. There's a reason that every console before the PS3 tries to minimize core console cost, and provide bells and whistles as accessories. Trying to provide value by cramming in tons of features just doesn't work.
 
It's the fact that Sony decided to not only include BR, but every other bell and whistle into the PS3 that is making a very expensive machine.
Click to expand...


What other bells and whistles? Just integrated wi-fi and HDMI, and how much can that cost, $5? The integrated card reader..few more dollars?

You can say integrated HDD, but the fact is 90% of 360's sold are premium and above, so it's not too much of an argument.

And I guess, supposedly better build quality on the mobo and such may cost them a bit more.

I think where integrated wi-fi hurts profits is on the loss of being able to sell a $100 accessory too a few people with more money than brains. That's different, though.
 
Mintmaster said:
I doubt $20 was the initial cost the HDD for the original XBox. Moreover, it was a big reason that XBox was huge/ugly and could never have a slick form factor like the slimline PS2. It was a big drag on XBox profitability, and I don't see how you could underestimate it.

Similarly, BR is surely not a marginal cost right now. Even more damaging is how it delayed the launch of the PS3 (or at least we think so). I really think XB360 would not have anywhere near its current success if PS3 launched earlier.

Anyway, I'll agree with your last paragraph. There's a reason that every console before the PS3 tries to minimize core console cost, and provide bells and whistles as accessories. Trying to provide value by cramming in tons of features just doesn't work.
Click to expand...

I said "eventually" ie. long term. The Xbox could not be shrunk because there was no real advantage in doing so since NVidia and Intel wouldn't cooperate to lower costs.
 
Biz.gamedaily report says Wii production up, PS3 production slows down - making price cut this year unlikely, according to Lazard Capital Markets analyst.
The latest report from Lazard Capital Markets suggests that Wii production is close to 1.5 million units per month. More importantly, PS3 production in Asia appears to be "temporarily" slowing down, leading analyst Colin Sebastian to believe that a price cut may not happen this year after all.
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A strong line up will sell systems, so they might wait for that before deciding on dropping the price...

On the other hand: all platforms have good games coming and I can't see the 360 not dropping in price. Another interesting year. :)
 
There's some seriously flawed logic there - if the production temporarily slows down, then sure that could mean that Sony doesn't need as many PS3s. But in my experience at least, normally a temporary slow-down in production points to a change in the production line. So it could point just as well to that they are ready to change to 65nm. And I wouldn't see why not either. We know that in theory they should be ready by now (Cell was scheduled to be ready for 65nm at the beginning of the year, and RSX shouldn't be too hard to get to 65nm either?)
 
Arwin said:
There's some seriously flawed logic there - if the production temporarily slows down, then sure that could mean that Sony doesn't need as many PS3s. But in my experience at least, normally a temporary slow-down in production points to a change in the production line. So it could point just as well to that they are ready to change to 65nm. And I wouldn't see why not either. We know that in theory they should be ready by now (Cell was scheduled to be ready for 65nm at the beginning of the year, and RSX shouldn't be too hard to get to 65nm either?)
Click to expand...

When you're not selling them as anticipated, there's no reason to keep producing the unit and stock up inventory. I'm quite sure the PS3 is selling well below Sony's predictions and when compared to the production plans laid out likely last year, it's been doing nothing but building inventory in warehouses.

If you swapped the sales figures for the PS3 and WII, you'd likely see the same report with names interchanged.
 
RobertR1 said:
When you're not selling them as anticipated, there's no reason to keep producing the unit and stock up inventory. I'm quite sure the PS3 is selling well below Sony's predictions and when compared to the production plans laid out likely last year, it's been doing nothing but building inventory in warehouses.
Click to expand...
Yep. Sony was producing almost the same rate as Nintendo per month. They both were targeting 6 mil before March 31 (Sony was a touch short), and Nintendo was producing 1 mil per month.

In April, the PS3 sold less than 130k total from Japan & USA (~43k in Japan, and 82k in USA). So unless Europe bought 800k, which is ridiculous looking at the plummeting software sales, something has gotta give.
 
RobertR1 said:
When you're not selling them as anticipated, there's no reason to keep producing the unit and stock up inventory. I'm quite sure the PS3 is selling well below Sony's predictions and when compared to the production plans laid out likely last year, it's been doing nothing but building inventory in warehouses.
Click to expand...

You could think that. Or you could think that the underlying problem is that the PS3 doesn't sell because it is too expensive. What would you do then - slow down production and postpone pricecuts?

It's not like they haven't already made some changes for the European PS3, and they may also now consider the level of backward compatibility sufficient to introduce those same changes into the other regions as well.

And if they now have enough stock, what better time to do it?

Note that I never said it was the wrong conclusion necessarily. I said that the reasoning was flawed because it came to only one conclusion. This is why so many analysts fail. They are often asked to lead (investors, I presume), and their clients want to know whether to buy or sell. But the best reason for answering good questions is so that we can use the answers to ask better questions, and so on and so forth. To do that, the best answer is to consider the most complete set of logical possibilities.

So if you had these two possible answers to the question 'why a temporary slowdown', what questions would you ask to get a clearer picture of the reasons for this slowdown?
 
Another report: http://biz.gamedaily.com/industry/feature/?id=16291

Greenwald expects that Microsoft will actually make the first move by the end of the summer. He believes that a $50 price cut on the 360 is on the way (across all SKUs), making the Xbox 360 Core SKU the exact same price as the Wii and the Pro SKU only $100 more than the Wii – potentially a more compelling value. "I don't think it would impact profitability much, as the component costs must have come down quite a bit by now (been in production for 18 months)," Greenwald commented to GameDaily BIZ. "Plus, they will make a lot of money off of Halo 3, obviously, and more and more software royalties as the installed base keeps growing."

Feeling the pressure from Microsoft's price drop during the summer and the continued success of the Wii, Sony is expected to "give in" around October and lower the PS3's price by $100. Greenwald also notes that this is perfect timing right in advance of the highly anticipated Grand Theft Auto IV, which launches October 16. Greenwald said that leading publisher Electronic Arts stands to gain the most from a PS3 price drop this fall.
Click to expand...

Sounds reasonable. I don't expect Nintendo to react (except for maybe a 'core' system @199).
 
Yeah I doubt nintendo will drop the price unless sales start falling behind. I wonder what a 100dollar pricedrop will do for the ps3 though. 500dollars is still alot of money and if the x360 also drops in price they still only come 50bucks closer.
 
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