The market isn't so tiny, there are about 5 mio PS2s out there. This just shows how price sensitive the [continental] european market really is. 360's headstart is not worth so much because -I think- noone is going to shift any serious numbers until after the next two pricecuts (bringing both into the sub 200€ territory). SCEE boss Reeves elaborated on this issue here (i.e. large PS2 sales in Germany only started when they hit the 149€ pricepoint...there's a nice chart from SCED, showing how few of the 4.5 mio PS2's (& PS1) sales (in Germany as of August 06) actually happend at a >200€ unit price.
NPD April 2007
- Thread starter thatdude90210
- Start date
The market isn't so tiny, there are about 5 mio PS2s out there. This just shows how price sensitive the [continental] european market really is. 360's headstart is not worth so much because -I think- noone is going to shift any serious numbers until after the next two pricecuts (bringing both into the sub 200€ territory). SCEE boss Reeves elaborated on this issue here (i.e. large PS2 sales in Germany only started when they hit the 149€ pricepoint...there's a nice chart from SCED, showing how few of the 4.5 mio PS2's (& PS1) sales (in Germany as of August 06) actually happend at a >200€ unit price.
That might be plausible if Microsoft's gaming venture wouldn't continue to bleed massive money.
That's okay, because outside of the beliefs of a very specific and small population Blu-ray is likewise almost no additional cost.PatrickL said:
???
Rolf do you seriously believe that Blu-ray does not contribute in a material fashion to the expense of the console?
Last edited by a moderator:
Only on the short term I'll wager.
You should believe it too.
http://www.sony.net/SonyInfo/News/Press/200704/07-037E/index.html
1000 Yen is going to be the price Sony asks third parties for the diode next month. 8.25USD or 6.11€ at today's rates.
The bringup costs were probably significant and a huge chunk of the losses Sony has posted recently, but the per-unit cost is demonstrably no longer an issue, and won't bar price-cuts or anything else from happening. It's good value.
Yeah, I doubt Microsoft will cut prices ahead of those titles' releases. It doesn't make sense to sell the console at a discount to those who would have bought one anyway because of the games.
The big question I think is whether Microsoft will cut prices for Christmas. On one day, the 360 will probably beat the PS3 without one. On the other hand, a big holiday season would go a long way in reaffirming the perception that they're the market leader. I could see the company doing something creative like offering a$100 rebate for buying both the 360 and the Zune.
scooby_dooby
Legend
What it shows is that they're not complete idiots, it's called smart product pricing.
They are doing the same thing in JPN and other struggling markets.
To call it pricedumping is retarded.
To get this straight, you'rde arguing that MS would not match a Sony pricedrop?.... I think you need to get closer to that coffee machine
I do agree with you that material cost differences will close quickly, that's why I think MS is making a large mistake by their laissez-fair attitude towards a pricedrop.
Last edited by a moderator:
scooby_dooby
Legend
I really don't get this argument. A pricedrop would immediately trigger a sustained boost in monthly sales, therefore people are buying the console who otherwise would not have.
IMO, the only solid argument against an MS pricedrop so far has been that sales aren't falling, well they're beginning too now.
But those are diodes and diodes alone. Take one of those drives apart and compare it to a DVD drive and see the difference in complexity - the OPU alone is a significant expense in these units. Now, no one more than me has highlighted how the eventuality of these drives is that they will reach cost-parity with DVD drives, but for the time being they are a very real factor.
In your original post you mentioned that there's a subset of the population seemingly confused into thinking that Blu-ray is a substantial expense; on the contrary I'm getting the feeling that there are a subset of folk that actually don't believe that Sony loses money on this console. Afterall, with a pricetag of $600, yet with theories estimating drive costs barely over $20 - what, Cell and RSX up at around $400?
Not to mention, the bring-up costs wouldn't have been something accounted for in SCE's losses, as it's a different division's capital investment. Something to keep in mind when putting said losses into perspective. How much do you think the present 60GB PS3 would have been sold for if it didn't include BD? $600 still?
Last edited by a moderator:
i am sure Gears of War and DeadRising would have sold a lot more 360s there. but they will have FM2 and Halo 3 won't they???
True, but why would they need that to happen immediately? A potential buyer currently deterred by the high price point certainly isn't going to run out and buy a PS3. He'll still be there when the price drop occur later. Deferring the sale a few months isn't a huge loss.
The holiday season is a little different, since the 360 would be competing with other products as a gift option, not just the PS3.
Yep, it's good old monopoly rent: charge everyone exactly what they are willing to pay. Those that buy now are willining to pay $600, cutting the price to $500 immediately loses you a bit of the profit (think of a sales/profit curve and drawing the big box at $500.. you miss the area above). The only problem with this analysis is that there are alternatives and customers have preferences, so they might not hold out. Water is the same chemical everywhere, console's are not
scooby_dooby
Legend
Because the cost difference between the two consoles will decrease fairly quickly, and MS's advantage with it.
Don't forget the added cost of the licenses to allow BluRay movie playback. This is a fixed cost added to every PS3 sold that Sony is powerless to cost reduce. I have no idea how significant they are, but you can't just ignore them.
In the case of the 360 this cost is rolled into the price of the add-on.
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.
the actual figures tell a different story
as of last month (year to date)
Platform Units
PS2 9488
PS3 4835
PSP 4475
X360 3070
NDS 2384
Wii 1796
Other 99
source Gfk
Microsoft can always respond to a Sony cut. It's not like not making it first reduces its effectiveness.
The fact the 360 is ripe for a cut means that Sony probably won't pull the trigger first. But lose more money when you know nearly for sure that it won't close the price gap? Microsoft is in far better position to use price as a weapon. A $100 cut to the 360 means a 25% reduction. The same cut to the PS3 is only 16.67%. And I doubt it'd boost sales significantly--at $500 the console still wouldn't be in the main-stream range.
I think Sony will start to bundle games with the PS3, as a way of offsetting the price difference, before implementing a cut.