Agreed, they should drop the price around Halo 3 time.
NPD April 2007
- Thread starter thatdude90210
- Start date
Agreed, they should drop the price around Halo 3 time.
Unreasonable. I think ms has mentioned in interviews that price cuts less than $100 tend to have little effect.
And as for doing $50 soon $50 in Nov or something..then you'll probably just anger people who think you're constantly cutting prices right after they bought.
Bank of America concurs. I can't say I agree with everything however, but the $100 price drop by fall not making much of a difference is one that I do agree with.
http://www.businessweek.com/innovat...0070529_903078.htm?campaign_id=rss_topStories
Well, if they can reduce the cost by 150$-200$, a decrease of 150-200$ of the price would be interesting moreover if they can sell more software
The problem is that they can't pass cost reduction to the consumers like that. They have to start getting closer to HW profitability somewhere, or the whole thing will be an ocean of red ink. For example, say they sell 5 millions at $600, losing $200 per console (that's one billion in losses). If they reduce the cost by $200, they can sell at the same price losing nothing. Or they could pass $100 to the consumer, lowering the price by $100 and reducing their losses by the same amount. But if they sell another 10 millions at $500, that still means they lose another billion dollar in the process (minus whatever they can recoup in SW sales and BR royalties). And of course, the lower the price, the greater the sales (unless something goes horribly wrong), which means as they get closer to mass market price, they absolutely have to be profitable on HW or the cumulative losses will bleed the company dry.
Well considering their first anticipations, i think the amount of loss doesn't matter much. If they want to gain some marketshare, they need to reduce ASAP the price. With increase production and time, the cost will continue to decrease even more, and the software part will be more and more profitable
Funny how the guy who wrote the article (not the BoA analyst) predicted that the PS3 will come out on top:
http://www.businessweek.com/innovate/content/oct2006/id20061030_448590.htm?chan=search
A hundred-dollar cut obviously isn't going to have a huge impact on sales. Cutting two hundred this early, though, is crazy. It'd push up their entire pricing schedule, meaning billions in loss over the life of the product.
If I'm the Sony exec in charge, I'd bundle four games with the console. If they're SCEA titles, they are cost-free to the company. And since the value of games depreciate rapidly, you can effectively roll back the discount by not replacing an old game in the bundle with something newer. For good measure I'd toss in the Spiderman trilogy too, maybe just for Christmas. That'd be over $300 in value, absolutely free!
I wouldn't call it free, because its lost opportunity, but I agree that bundling is a more likely than a huge price cut. Perhaps a bit of both.
Bundles such as these, I'm not sure why, but almost never happen. The most I've seen is two games I believe, on Xbox 1?
For starters, they probably plunder and kill attach rate, the real lifeblood of the industry.
True enough. There's definitely a opportunity cost. That has to be balanced against not having any opportunity to sell a game though--i.e. someone not buying a PS3 ever.
A far better solution would have been to include a few years worth of online gaming. That isn't possible, of course, since some bonehead at Sony decided to make their online service free. But had they priced it at $50 a year and bundle four years with the console, they would be able to argue far more effectively that the PS3 isn't more expensive than the X360.
I think one major problem Sony faces with the 65nm parts is that they've got plenty of 90nm inventory, and they are unlikely to even be able to get rid of all of it this year with a $100 price cut. So they cannot reduce the price based on the fact they've got 65nm chips, otherwise they reduce the value of their current inventory.
One solution I've proposed in the past is to cut the current 90nm PS3 to $479-499, and create a new $379-399 model ('PS3 Slim'?) with 65nm chips, a cheaper PSU, a cheaper case, cheaper fans/heatsinks, and a smaller form factor. The catch would be no WiFi, no memory card board, smaller HDD (it doesn't even have to be cheaper, it just has to be worse to justify the higher-end model before that SKU's inventory is out). In order to save on the costs of heatsinks and give another slight advantage to the 60GB+ model, it could also be slightly louder.
Note that I'm just speculating. Who knows what Sony is thinking of right now, and whether they even found a good solution yet, although I'd certainly hope they did by now...
One solution I've proposed in the past is to cut the current 90nm PS3 to $479-499, and create a new $379-399 model ('PS3 Slim'?) with 65nm chips, a cheaper PSU, a cheaper case, cheaper fans/heatsinks, and a smaller form factor. The catch would be no WiFi, no memory card board, smaller HDD (it doesn't even have to be cheaper, it just has to be worse to justify the higher-end model before that SKU's inventory is out). In order to save on the costs of heatsinks and give another slight advantage to the 60GB+ model, it could also be slightly louder.
Note that I'm just speculating. Who knows what Sony is thinking of right now, and whether they even found a good solution yet, although I'd certainly hope they did by now...
Who would choose a old model PS3 over a $100.00 cheaper smaller form factor PS3 just for Wifi and memory cards? Sony would be stuck with a bunch of inventory nobody wants. They would be forced to reduce prices anyways to reduce inventory.
Just finished reading a translated Ubi interview. They seem to have real faith in the Wii and it's positioning in the market. They admitted to poor quality ports to the Wii and say that future games will be of much higher quality.
I think if Ubi and EA are behind Wii it stands a real good chance.
I think if Ubi and EA are behind Wii it stands a real good chance.
Well, if you had them at $399 and $479, and had one more game or Bluray bundled with the $479 version, and that it was also quieter... Heh. As long as the vast majority of the inventory is gone by mid-2008, what's the problem?
RancidLunchmeat
Veteran
How does any bundle help the PS3? The PS3 isn't selling because it's too expensive. Its the same reason the Wii is selling alot, and the 360 has hit a wall. Its about price, and what you get for that price is a distant second in terms of consideration.
The PS3 is already bundled.. it's bundled with a BR drive, with WiFi, with a HDD. Its because of those bundled features that it isn't selling.
Adding more 'value' clearly isn't what the market desires. 'It's a $1000 console for only $600!'
Great. Nobody cares. They want a $300 console, maybe with the ability to add more features to it later, maybe not.
I don't think the market cares if it were a $10,000 console they were selling for $600.