There's a nice thing called dollar-based sales, $599 is 34% more expensive than $399.
It is one of those nice numbers that needs a context. From a Sony perspective looking at install base growth it doesn't mean much at this point (that could change). It actually has some negatives.
1. Consumers pay more, and Sony gets less consumers out of it. Not good.
2. Consumers are paying more on the console... and buying less software? Not good.
3. Follow economic lines. A percentage of people have the majority of wealth. I believe these numbers are wrong, but I will use them because most are familiar with them and they show my point. 5% of American's own 95% of the wealth. Those 5% can pay more for their toys. But dropping the price down to, say, $400 doesn't result in a direct ratio of growth. First, those buying a $400 item include the same window of consumers on the other platform who entered at $600. Call it potentially lost money on the $400 competitor.
It is like the $250,000 car dropping down to $150,000. That is a huge drop, but the percentage of people who can still buy such is small and still within that same 5%.
Personally, I think price points are more valid than dollar based sales *for consoles*. For games? Dollar based sales can be very meaningful, especially to publishers.
On the console side it is an accessibility issue, and this is why traditionally price points (and not value or total dollar sales) have been more relevant. Average consumers are influenced by many things, a significant one being the justification they have for a spontanteous purchase.
I recently had to replace my old beater of a car with a "new" used car. I had a criteria of need (reliability, safety, within a dollar range) and there was a cap. Regardless of the value of a higher priced vehicle I had set a budget for the value I was willing to invest. A $10,000 car could have been 4x as valuable as the $5,000 car, but it wouldn't have mattered because a) the baseline checklist requirements were met by both and b) the $10,000 was outside my the range I could justify--even at the added value.
Some, not all, of those principles apply to electronics and entertainment. Different cost ranges have different thought processes that induce a purchase as well as different potential consumer sizes.
The thought process behind a $199 console purchase and a $599 are quite different, as are who the consumers are and how many are potentially in the market.
Or XB360 is 66% the price of PS3, which makes PS3 34% more expensive. Not a
traditional comparison, I'll agree
The fun with numbers!
