NPD April 2007

[dobwal]

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?

The inventory for the old PS3 would barely move. Add a game or BluRay to the PS3 slim and its still cheaper than the old bundle.

Its like a car salemen trying to sale you a 2007 M3 with a free alarm for a $3000 price premium over an already released redesigned 2008.

 

[borowki]

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.

That's an unworkable plan from a promotion standpoint. I mean, what can you tell the public? "Check out the new, shoddier PS3! It's cheap and it's loud!"? Consumers will just get confused and either the new model will end up a flop or the old one will get stranded.

 

[bomlat]

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.

possibly it will shocking for you,but if you have a 200$ wii,360 and ps3 the wii will be the winner.

One of my friend will buy a wii,and not because he is not able to buy a ps3 or an 360 (he brought a videocard a few weeks ago which cost as much as a ps3), but because the wii is "the best".
exactly:"the graphics of the wii suck, but the controller is sooooo good"

other shocking:
1.he is a pc only guy until now
2.he said that he will buy a wii even if he will have to buy original softwares .(of course if it will have a modchip he will install that)
It was a shock for me.

 

[dobwal]

possibly it will shocking for you,but if you have a 200$ wii,360 and ps3 the wii will be the winner.

One of my friend will buy a wii,and not because he is not able to buy a ps3 or an 360 (he brought a videocard a few weeks ago which cost as much as a ps3), but because the wii is "the best".
exactly:"the graphics of the wii suck, but the controller is sooooo good"

other shocking:
1.he is a pc only guy until now
2.he said that he will buy a wii even if he will have to buy original softwares .(of course if it will have a modchip he will install that)
It was a shock for me.

How is this shocking as your experience with your friend is little proof that at the same price the Wii will outperform the PS3 and 360.

 

[Cheezdoodles]

possibly it will shocking for you,but if you have a 200$ wii,360 and ps3 the wii will be the winner.

One of my friend will buy a wii,and not because he is not able to buy a ps3 or an 360 (he brought a videocard a few weeks ago which cost as much as a ps3), but because the wii is "the best".
exactly:"the graphics of the wii suck, but the controller is sooooo good"

other shocking:
1.he is a pc only guy until now
2.he said that he will buy a wii even if he will have to buy original softwares .(of course if it will have a modchip he will install that)
It was a shock for me.

This is possibly shocking to you, but a single experience in YOUR life, does not define reality for everybody else. So please, if you want to present an argument, present a better one.

 

[ninzel]

And no one has any facts to say that the PS3 or 360 would sell as well as Wii at the same price either,none of us knows the future. It could be that the interface,the casual software,the look and size as well as other factors appeal to certain consumers regardless of price. Who knows.
Edit: Unless you are pro that's job is to analyze consumerhabit's in an objective manner we tend to put our preferences on others. You would not think that Apple would be able to sell a lesser performing computer for more money that comparable PC,but they do. Just one example.

 

[Cheezdoodles]

Isn't really all that hard to start figuring out that kind of stuff on a theoretical level tho. After the first price drops, we can have a pretty good idea on the different price-elasticities for each console with some math. Of course it would still be flawed in a theory about what would happend if all consoles launched at $200 and marketing\hype might have allready doomed one of the consoles by the time we get enough pricedrops to get some real comparisons in

 

[ninzel]

This holiday and the first price drop will certainly be revealing. It could be that the price is the only thing holding the 360/ps3 back or it could be that no matter what the price the Wii will be more appealing because it has software more properly targeted to the larger casual audience.
I can't wait to see if the Wii can withstand MS's first aggressive move.

 

[borowki]

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.

Duuuuh. Why restate the obvious?

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.

The PS3 is a game console. You don't need a BR drive or Wi-Fi to play games. You do need games to play games. It doesn't take a genius to see a distinction there.

 

[Paul_G]

Duuuuh. Why restate the obvious?



The PS3 is a game console. You don't need a BR drive or Wi-Fi to play games. You do need games to play games. It doesn't take a genius to see a distinction there.

No, but still, not many consumers see the distinction. For PS2, realistically, you needed a memory card, something you had to pay extra for. If Sony had added the price of a memory card to the PS2 and made that it's launch price, i think there would have been a small group of people who would have said it was then too much. The problem with adding value, be it through games or Blu-ray or wifi or whatever is that the consumer generally doesn't see it as value. They see the sticker price and can't move past it. I would be pretty confident that if you sold a PS3 with two bundled games for $600 and a PS3 on it's own for $500, the one on it's own would sell better. Even if a condition of the sale was two separate game purchases, it would still do better. Sony need to get that base cost down, especially since they canned the 20GB model. Adding games will not do much to sway sales IMO

 

[borowki]

No, but still, not many consumers see the distinction. For PS2, realistically, you needed a memory card, something you had to pay extra for. If Sony had added the price of a memory card to the PS2 and made that it's launch price, i think there would have been a small group of people who would have said it was then too much.

Again, that's an invalid comparison. Most people wouldn't know they need a memory card until they have use the PS2 already, whereas they always budget for a game or two when they purchase a console. No one plans to have a game console on its own.

The problem with adding value, be it through games or Blu-ray or wifi or whatever is that the consumer generally doesn't see it as value. They see the sticker price and can't move past it. I would be pretty confident that if you sold a PS3 with two bundled games for $600 and a PS3 on it's own for $500, the one on it's own would sell better.

That's obvious. But a one hundred dollar cut costs you a hundred dollar, whereas a couple games carry a monatary cost of maybe a dollar. Maximizing the perceived value while minimizing actual cost--that's the trick. Consumers might not deduce in their heads a bundled game's full sticker price, but it'd be worth something.

 

[Paul_G]

Again, that's an invalid comparison. Most people wouldn't know they need a memory card until they have use the PS2 already, whereas they always budget for a game or two when they purchase a console. No one plans to have a game console on its own.

Well I think we're just going to have to disagree on this. I don't know anyone who quotes the price of a console as the console price + 1 game. To me that means they're not budgeting for it. No one plans to have a console without being able to save their games. Whether they budget for it or not though, they still have to buy it, a $50 game or a memory card for however much they cost is an impulse buy, and i find most people don't factor it in as a cost. Sony could drop the price some, catch those people who see a pricedrop and bite, and they'd still buy a game, and Sony would make retail revenue off of it.

That's obvious. But a one hundred dollar cut costs you a hundred dollar, whereas a couple games carry a monatary cost of maybe a dollar. Maximizing the perceived value while minimizing actual cost--that's the trick. Consumers might not deduce in their heads a bundled game's full sticker price, but it'd be worth something.

Again, i disagree. Yes, the physical value of the game was only $2 or something, but it's a sale lost. If they bundled MS and R:FOM with the PS3, as an example, for every one of those they sold, it's a near certainty they won't sell a retail copy because that person already owns it. They may not have bought it anyway but still, some people would have, so the real cost is whatever sony gets from each retail game sale. Granted it's not a huge amount, but it's not a dollar or two as you suggest

 

[Johnny Awesome]

And no one has any facts to say that the PS3 or 360 would sell as well as Wii at the same price either,none of us knows the future. It could be that the interface,the casual software,the look and size as well as other factors appeal to certain consumers regardless of price. Who knows.
Edit: Unless you are pro that's job is to analyze consumerhabit's in an objective manner we tend to put our preferences on others. You would not think that Apple would be able to sell a lesser performing computer for more money that comparable PC,but they do. Just one example.

You're correct, but it's safe to say that X360 and PS3 would sell more units than they are right now if their prices were lower. Whether or not the X360 would sell enough additional units to overtake Wii monthly sales is anyone's guess, but I think a $100 drop would make them competitive with Wii in NA over the holidays. Europe is hard to say. Japan is lost to MS.

 

[infinity4]

And no one has any facts to say that the PS3 or 360 would sell as well as Wii at the same price either,none of us knows the future. It could be that the interface,the casual software,the look and size as well as other factors appeal to certain consumers regardless of price. Who knows.
Edit: Unless you are pro that's job is to analyze consumerhabit's in an objective manner we tend to put our preferences on others. You would not think that Apple would be able to sell a lesser performing computer for more money that comparable PC,but they do. Just one example.

people who want wii are buying it NOW. people who want ps3 or 360 aren't buying because of its price. except ps3 all consoles have games to grab for and it seems more of true when GTA IV and Halo 3 are coming this autumn.

 

[borowki]

Well I think we're just going to have to disagree on this. I don't know anyone who quotes the price of a console as the console price + 1 game. To me that means they're not budgeting for it. No one plans to have a console without being able to save their games. Whether they budget for it or not though, they still have to buy it, a $50 game or a memory card for however much they cost is an impulse buy, and i find most people don't factor it in as a cost. Sony could drop the price some, catch those people who see a pricedrop and bite, and they'd still buy a game, and Sony would make retail revenue off of it.

As someone who spent his youth playing games on a NES, I can tell you, you don't need to save games to enjoy them

Again, i disagree. Yes, the physical value of the game was only $2 or something, but it's a sale lost. If they bundled MS and R:FOM with the PS3, as an example, for every one of those they sold, it's a near certainty they won't sell a retail copy because that person already owns it. They may not have bought it anyway but still, some people would have, so the real cost is whatever sony gets from each retail game sale. Granted it's not a huge amount, but it's not a dollar or two as you suggest

As mentioned already, bundled games aren't really free, but the opporturnity cost depreciates rapidly. Even new game released reduces an existing game's value. R:FOM bundeld in the Fall of 2008 is not going to cost you much, since no one would buy it anyway. If the choice is between someone not buying R:FOM with the PS3 in 2007 (because it's bundled) or not buying it a year later (because it's old), you should choose the former scenario.

 

[bomlat]

people who want wii are buying it NOW. people who want ps3 or 360 aren't buying because of its price. except ps3 all consoles have games to grab for and it seems more of true when GTA IV and Halo 3 are coming this autumn.

assumption.
1.potential max market size on each price level
2.customer value of each console

If the customer value of the wii higher than the competitors, the price can be higher but the sales will be good.
And if we can be honest, the customer value of the wii on avarage is higher thatn the value of the competitors.
So, the sales diferece not came from the price,but came from the value.

 

[dobwal]

assumption.
1.potential max market size on each price level
2.customer value of each console

If the customer value of the wii higher than the competitors, the price can be higher but the sales will be good.
And if we can be honest, the customer value of the wii on avarage is higher thatn the value of the competitors.
So, the sales diferece not came from the price,but came from the value.

Value is directly affected by price.

Your right, consumers currently find more value in the Wii.

However, do you think that the Wii could sustain such sales at a $600.00 price point?

No, if that was logically feasible then Nintendo would of priced the Wii at a much higher price point.

Do you even think that the Wii could sustain PS3 level sales at a $600.00 price point?

Noone knows if it could or if it couldn't. It would seem highely unlikely but whether or not it could is just speculation.

 

[Paul_G]

As someone who spent his youth playing games on a NES, I can tell you, you don't need to save games to enjoy them

I don't want to keep coming back to this, you're right of course - You didn't need to save games to enjoy them on the NES, but I don't think you can compare the days of the NES, where games often could be completed in an afternoon, to the last 5 years. I can only really think of beat 'em ups as a genre that *might* let you get away with no memory card. It is an essential purchase.

As mentioned already, bundled games aren't really free, but the opporturnity cost depreciates rapidly. Even new game released reduces an existing game's value. R:FOM bundeld in the Fall of 2008 is not going to cost you much, since no one would buy it anyway. If the choice is between someone not buying R:FOM with the PS3 in 2007 (because it's bundled) or not buying it a year later (because it's old), you should choose the former scenario.

But we're not talking about bundling in Fall of 08...are we? we're talking about bundling in the near future in preference to cutting the price. I can't see that as a good move. If they want to get down to $400 by fall '08 and then bundle games, i can't see a problem, what i see a problem with is trying to entice people with a bunch of free games at $600. IMO,at that price, it's not going to work; no matter what you put in it.

 

[bomlat]

Value is directly affected by price.

Your right, consumers currently find more value in the Wii.

However, do you think that the Wii could sustain such sales at a $600.00 price point?

No, if that was logically feasible then Nintendo would of priced the Wii at a much higher price point.

Do you even think that the Wii could sustain PS3 level sales at a $600.00 price point?

Noone knows if it could or if it couldn't. It would seem highely unlikely but whether or not it could is just speculation.

Yes, basicly the issue is we are not able to make experiments, so we have to discuss about indirect data.
But in this enviroment, the best way to see the possible result is the direct obsevation of the customer behavior.(like if your job is to found a root cause of a rare soft/process bug)
Data:
-second hand prices
-current sales numbers
-general internet sources: atricles, forums and so on
-personal experiences
-personal impressions

we can use the common sense to see what is the result of this observations.

What is the basic equatation that we can make?

First,the money that we pay for anything on a big scale corelate to the value,and the value is defined on personal basis.If your time worth more (you earn more) the money that you spend can be more for the same time period than for an other guy who earn less money.
The equatation can be diferent.If you earn less,but you occupy yourself only with that activity (HC gamer) in that case you can spend more money than your avarage salary rate for the same "toy".

Ok, after it ask the question:
If we assume that the customer base of the wii and the customer base of the 360+ps3 don't have common elements , and if we assume that the price of the wii is on the same level as the price of the 360, the possible sales number can be only the half of the current sales number?(equal with the 360 sales)

Can we prove or falsify this assumption?
I think partialy yes .

First, te sales drop would be bigger than the half,because right now the wii market is a sellers market.
Second, the wii market have the same quantity of big fish customers like the hc market, simply because the bigger userbase can have the same number of high dispsable income guys.

So, finaly:
Of course,the above statements are not on strong numbers,so the weight of the result is only aprox. 65%.
So, the first question: the

 

[dobwal]

Yes, basicly the issue is we are not able to make experiments, so we have to discuss about indirect data.
But in this enviroment, the best way to see the possible result is the direct obsevation of the customer behavior.(like if your job is to found a root cause of a rare soft/process bug)
Data:
-second hand prices
-current sales numbers
-general internet sources: atricles, forums and so on
-personal experiences
-personal impressions

we can use the common sense to see what is the result of this observations.

What is the basic equatation that we can make?

First,the money that we pay for anything on a big scale corelate to the value,and the value is defined on personal basis.If your time worth more (you earn more) the money that you spend can be more for the same time period than for an other guy who earn less money.
The equatation can be diferent.If you earn less,but you occupy yourself only with that activity (HC gamer) in that case you can spend more money than your avarage salary rate for the same "toy".

Ok, after it ask the question:
If we assume that the customer base of the wii and the customer base of the 360+ps3 don't have common elements , and if we assume that the price of the wii is on the same level as the price of the 360, the possible sales number can be only the half of the current sales number?(equal with the 360 sales)

Can we prove or falsify this assumption?
I think partialy yes .

First, te sales drop would be bigger than the half,because right now the wii market is a sellers market.
Second, the wii market have the same quantity of big fish customers like the hc market, simply because the bigger userbase can have the same number of high dispsable income guys.

So, finaly:
Of course,the above statements are not on strong numbers,so the weight of the result is only aprox. 65%.
So, the first question: the

Huh?

Value doesn't always scale at the same rate as disposable income. If you made $25,000 and bought a $250 dollars Wii doesn't mean if you made $50,000 you would automatically buy the $Wii at $500.