NPD March 2007

[tongue_of_colicab]

It's funny, because everyone assuems PS3 will take a long time to drop price, what if it doesn't? What if they shave off $200 by this Xmas and have a console at $399? And agressively pricedrop through 2008?

They are already claiming cheap BR diodes to come in June, the drop to 65nm is close, and the EE can be removed from future models, this adds up. Once the cost of BR and CELL come down, there's really not alot seperating these machines in production cost.

All of a sudden ms's $300 advantage will be $50.

I still think it's a huge mistake for MS to be sitting back doing nothing...

Hmm I wonder if they could drop the price that fast. If that was the case, wouldnt it have been better to have dropped the original price from 600 to 500 and take a bigger loss of the first few models but sell more? because if they could drop the costs that fast that would already have some impact after the first few months.

I dont think MS is make a mistake. Why would the reduse price now? x360 is selling decent enough. They probably wait for a sony pricedrop. If sony drops your 200, MS might drop 100 too, that might have a bigger impact.

 

[expletive]

It's funny, because everyone assuems PS3 will take a long time to drop price, what if it doesn't? What if they shave off $200 by this Xmas and have a console at $399? And agressively pricedrop through 2008?

They are already claiming cheap BR diodes to come in June, the drop to 65nm is close, and the EE can be removed from future models, this adds up. Once the cost of BR and CELL come down, there's really not alot seperating these machines in production cost.

All of a sudden ms's $300 advantage will be $50.

I still think it's a huge mistake for MS to be sitting back doing nothing...

Agreed, If i didnt know better, I would think it was the Xbox that sold 100 million last generation by the way MS is behaving.

 

[oli2]

More than price cut, Microsoft needs Software. This christmas (september or October) will be a better time to price drop... If they don't do it at this time, i will personnaly question their policy.

 

[DuckThor Evil]

Agreed, If i didnt know better, I would think it was the Xbox that sold 100 million last generation by the way MS is behaving.

I'd say it's losses of billions that made them behave this way, it's time to take back some. In general I have a bit of hard time understanding why some people feel that ms should be dropping the price like grazy, here they are with a machine that has similar power levels, imo more compelling line up for the year and already a price tag of 200-300$ less than the competition (with the loss of the 20GB ps3) and yet you feel that their pricing is arrogant?

The peripheral pricing is bad, but the main sku is very competitive and MS is not in a place to start making panic price cuts, there is not a need for one.

 

[scooby_dooby]

In general I have a bit of hard time understanding why some people feel that ms should be dropping the price like grazy,

Like crazy?? It's 16months after launch, a $100 drop is anything but 'crazy.' It's basically industry standard to have a pricedrop within this timeframe. I would think that going much longer that a year and a half, without a single pricedrop would be more crazy and unprecedented.

I mean, if we use your guys' logic, PS2 would never have dropped in 2001 to $199, a move that propelled them to record smashing sales.

Hell, they had an install lead of over 15million at the time(?) and still dropped the price.

I think people should look more closely at what made the PS2 successful, one of the key factors was aggressive and consistent pricedrops which constantly put the pressure on their opponents. Basically, the opposite of what MS is doing right now, even though they had a much stronger position at the time.

 

[function]

Don't forget that MS are in this to make money. What was best for Sony in 2001 might not be best for MS in 2007.

While they are still selling at a level they are happy with, and they aren't being outpaced by their direct rival (far from it) they might as well take the extra money on the unit's they're selling (and they might as well release the Elite).

MS might not want a major sales boost on loss making units quite yet - the 65 nm 360s are still some way off and they are steadily working their way through their older units. They would make losses now that they don't necesserily need to make if they wait a little longer. They also no doubt want to win the sales war at Christmas - saving their price cut for October (with Halo 3 landing at the same time) would give them a powerful way to combat the expected PS3 price cut and likely huge demand for the Wii amongst existing gamers.

Save your smart bomb for the end of level boss, don't waste it on the puny little fighters near the start of the level - especially if you'll be hit by the blast at that point too.

 

[Cheezdoodles]

Like crazy?? It's 16months after launch, a $100 drop is anything but 'crazy.' It's basically industry standard to have a pricedrop within this timeframe. I would think that going much longer that a year and a half, without a single pricedrop would be more crazy and unprecedented.

I mean, if we use your guys' logic, PS2 would never have dropped in 2001 to $199, a move that propelled them to record smashing sales.

Hell, they had an install lead of over 15million at the time(?) and still dropped the price.

I think people should look more closely at what made the PS2 successful, one of the key factors was aggressive and consistent pricedrops which constantly put the pressure on their opponents. Basically, the opposite of what MS is doing right now, even though they had a much stronger position at the time.

Your' looking at it from a wrong perspective, because you are a gamer. You should be looking at it from Microsoft's perspective, and function pointed out in the above post, they are doing things the way they "should"

 

[scooby_dooby]

Your' looking at it from a wrong perspective, because you are a gamer. You should be looking at it from Microsoft's perspective, and function pointed out in the above post, they are doing things the way they "should"

Not at all, from a gamers perspective I really don't care. Why do I care? I own the console, paid $500 CAD for it, well worth it imo. Tons of good games coming, I'm satisfied.

I'm looking at it strictly from MS's perspective. My sentiments were echoed by Epic's Tim Sweeney so I'll just paraphrase him:

"If MS concentrated more on growing their install base, rather than growing their profits, they would be much more succesful in the long run."

There is no possibility that the 360 will be anything but a very profitable console this generation, so this fixation on short term gains is an extremely poor strategy imo. They won't always have a signifigant price advantage, they should be using it while they can.

 

[scooby_dooby]

Save your smart bomb for the end of level boss, don't waste it on the puny little fighters near the start of the level - especially if you'll be hit by the blast at that point too.

lol, well..I can't argue with that little pearl of wisdom

 

[dobwal]

Like crazy?? It's 16months after launch, a $100 drop is anything but 'crazy.' It's basically industry standard to have a pricedrop within this timeframe. I would think that going much longer that a year and a half, without a single pricedrop would be more crazy and unprecedented.

I mean, if we use your guys' logic, PS2 would never have dropped in 2001 to $199, a move that propelled them to record smashing sales.

Hell, they had an install lead of over 15million at the time(?) and still dropped the price.

I think people should look more closely at what made the PS2 successful, one of the key factors was aggressive and consistent pricedrops which constantly put the pressure on their opponents. Basically, the opposite of what MS is doing right now, even though they had a much stronger position at the time.

The PS2 price drops weren't aggressive as the first price drop the PS2 in the US was roughly 19 months after its US introduction. Japan saw the PS2 get its first price cut 13 months after launch. Europe received a price cut the quickest and that was around 6 months. However, the European cut was still 17 months after the PS2 had be introduced in Japan.

To put it into better perspective by the time the US received its first price cut for the PS2, Sony had shipped ~30 million units. Japan received a price cut of about $50.00 after about 1 year, but I doubt the 360 is at its original price point in Japan at this time anyway.

 

[TheChefO]

It's funny, because everyone assuems PS3 will take a long time to drop price, what if it doesn't? What if they shave off $200 by this Xmas and have a console at $399? And agressively pricedrop through 2008?

They are already claiming cheap BR diodes to come in June, the drop to 65nm is close, and the EE can be removed from future models, this adds up. Once the cost of BR and CELL come down, there's really not alot seperating these machines in production cost.

All of a sudden ms's $300 advantage will be $50.

I still think it's a huge mistake for MS to be sitting back doing nothing...

I don't assume to know when they will drop the price or how much (predicting Sony's moves lately would require a crystal ball), but If they did manage a $200 price cut this year, MS could easily respond with a $200 core and $300 premium. A $200 core this year with H3 and GTA4 will be killer.

I agree though, (and said as much) MS should be maximizing their current position and a price drop around now would be a good move IMO. Demand picks up and they start their ramp into the important Q3 Q4 period.

 

[DuckThor Evil]

Like crazy?? It's 16months after launch, a $100 drop is anything but 'crazy.' It's basically industry standard to have a pricedrop within this timeframe. I would think that going much longer that a year and a half, without a single pricedrop would be more crazy and unprecedented.

But imo it's little bit grazy when you are already around 40% cheaper than your competition with a product that is very competitive and outselling the main competitor.

I think people should look more closely at what made the PS2 successful, one of the key factors was aggressive and consistent pricedrops which constantly put the pressure on their opponents. Basically, the opposite of what MS is doing right now, even though they had a much stronger position at the time.

I don't think PS2 can be used as a metric, because the market situation was so different at the time. The hype surrounding PS2 was unstoppable at the time and the competition was rather weak eventhough much closer in price than what the situation is now. If Xbox had launched at 599$ in US and had it been known beforehand I doubt Sony would have dropped the price like they did.

The bottom line what I'm saying is that the price cut is not needed, because it's already so much cheaper and that a price cut later on the year or at a start of next year will eventually generate similar amount sales for MS with higher profitability. This I believe is due to the strong fall line up that will sell the units despite no price cuts during the busiest shopping season of the year.

If they get everything to 65nm before christmas season, then they have more options. Of course all of this is very much speculation on my part as I don't have the accurate POM costs and other important information at my disposal.

I personally think MS should concentrate a bit more on the European front, Like establishing the video marketplace here too and in general make more noise about the system as I feel the battle is much harder for them here, NA looks like it's almost in the bag.

 

[pipo]

A $200 core this year with H3 and GTA4 will be killer.

You bet. I wonder if Nintendo will sell a core system for $199 by the end of the year too.

Right now it looks they'll sell anything they ship anyway...

 

[thatdude90210]

The USA NPD numbers are coming out in a couple of hours.

In the meanwhile, here are some Canada NPD numbers to chew on (numbers wise, Wii > PS2 + PS3 + x360):

Wii 42100
DS 34900
PS2 18000
360 12800
PSP 12100
GBA 7900
PS3 7200

 

[Natoma]

The USA NPD numbers are coming out in a couple of hours.

In the meanwhile, here are some Canada NPD numbers to chew on (numbers wise, Wii > PS2 + PS3 + x360):

Wii 42100
DS 34900
PS2 18000
360 12800
PSP 12100
GBA 7900
PS3 7200

Thanks for the #s. Should probably start a new thread though. April NPD Numbers.

 

[Carl B]

Should probably start a new thread though. April NPD Numbers.

Yes, agreed.

 

[hongcho]

Thanks for the #s. Should probably start a new thread though. April NPD Numbers.

Or one could do the same as the "Japanese Sales" thread...

Hong.

 

[Natoma]

Or one could do the same as the "Japanese Sales" thread...

Hong.

Disagree. The japanese sales thread is updated weekly, so it makes sense to have one thread rather than a spam of them. NPDs only come out once a month.