Playstation 3: Hardware Info and Price

[scooby_dooby]

Ok, well here's some hard numbers.

30million PS2 were shipped before the $199 pricepoint, 73million were sold after it hit that point. So 73% of the PS2 sold were sold below $200, interesting number...

In the 12months leading up to the pricedrop, May 2001-May 2002 ps2 sold ~17million consoles. In the 12 months after the pricedrop it sold ~23million units.

http://www.scei.co.jp/corporate/data/bizdataps2_e.html

 

[Arwin]

Those numbers are meaningless as the type of gamer I'm talking about is interested only in getting the best game library for as cheap as possible, which means they did not buy an XBOX last generation, but instead bought PS2.

So if you're going to do any numbers, do them on the PS2. How many of it's 100million units were sold below $200?

But that's my point. Only, say, 37 million of those 100 million were sold in America. The rest in other areas. You can't take an arbitrary number and keep that the same over time, that's silly. More sense would be to take a percentage of the average family income or something.

North America
PlayStation 2 - 32.86 million
Xbox - 13.2 million
GameCube - 10.11 million

Japan / Asia
PlayStation 2 - 19.47 million
Xbox - 1.7 million
GameCube - 3.78 million

Europe / PAL
PlayStation 2 - 29.06 million
Xbox - 5.0 million
GameCube - 4.13 million

Worldwide
PlayStation 2 - 81.39 million
Xbox - 19.9 million
GameCube - 18.03 million

These are end of 2004 figures. I'm willing to bet that the Xbox and PS2 figures here are going to be a major influence on the initial sales of both systems. Only when the 360 distinguishes itself clearly enough as something a lot better than last gen's Xbox, will it start doing significantly better than the PS3. At least, that's what I predict. I could be wrong, obviously. If price is an issue for a consumer, he or she might go for a Wii instead, so it's a tricky business. The 360 could become best of both worlds, or it could fall inbetween, not having any distinguishing marks other than a proven Live service (and Halo?). But that could still be enough for the U.S. market. Don't underestimate the power of being on home ground.

But I'm also interested in what will happen with consoles in general. Console household penetration has kept on growing; will that slow down with this generation, stay the same, or increase?

 

[scooby_dooby]

But that's my point. Only, say, 37 million of those 100 million were sold in America. The rest in other areas. You can't take an arbitrary number and keep that the same over time, that's silly.

Actually it was 42million, but I understand what you're saying, of course the $200 pricepoint is important mainly with regards to North America, other regions will have different thresholds.

It's also very 'silly' to say that the $200 pricepoint is meaningless.

Consider that in the 4months prior to the PS2 pricecut it sold ~5 million units(~1million in the US), in the 4 months after the drop to $199 it sold ~10 millionunit (5million in the US). Still think it's meaningless? It then went on to sell nearly 10million from Sep-Dec that holiday season, smashing the previous years # of 5 million.

one more comparison:
X-mas Sales #'s (09/30-12/31)

2001 before pricedrops
EU - 2.4
US - 1.6
JPN - 1.8

2002 after pricedrops
EU - 3.3
US - 3.7
JPN - 1.5

Notice how the EU number for 2001 seems abnormally high? It's not coincidence that EU recieved a pricedrop to $199 GBP in Sep 2001. It also recieved another in Sep 2002.

 

[RancidLunchmeat]

Consider that in the 4months prior to the PS2 pricecut it sold ~5 million units, in the 4 months after the drop to $199 it sold ~10 million units. Still think it's meaningless? It then went on to sell nearly 10million from Sep-Dec that holiday season, smashing the previous years # of 5 million.

Now those are interesting, I guess I didn't pay enough attention to the sales figures (I didn't do any analysis, I just glanced at the monthly figures they appeared fairly static except for December).

But, assuming those statistics are true, we can pretty much determine the volume of consumers who will purchase a console above the $199 price point. That pool was drying up prior to the price cut. The sales after the price cut (which also total 70% of the PS2s sold, I believe?) are those that were created by the price cut. Doubling sales volume over the same period of time after an event is a rather strong correlation.

 

[Carl B]

But, assuming those statistics are true, we can pretty much determine the volume of consumers who will purchase a console above the $199 price point. That pool was drying up prior to the price cut. The sales after the price cut (which also total 70% of the PS2s sold, I believe?) are those that were created by the price cut. Doubling sales volume over the same period of time after an event is a rather strong correlation.

Again though, saying 70% of the PS2's sold at $200 and under isn't the same thing as saying that only 30 million PS2's would have sold total if there were no price cut at all. Sometime in the four years between May 2002 and May 2006 I'm sure they would have managed to sell some more consoles at $299.

Anyway I'm not playing down the importance of price cuts of course, but there's various factors that go into it all.

That's a great chart though Scooby, thanks for finding that.

 

[Tap In]

one more comparison:
X-mas Sales #'s (09/30-12/31)

2001 before pricedrops
EU - 2.4
US - 1.6
JPN - 1.8

2002 after pricedrops
EU - 3.3
US - 3.7
JPN - 1.5

Notice how the EU number for 2001 seems abnormally high? It's not coincidence that EU recieved a pricedrop to $199 GBP in Sep 2001. It also recieved another in Sep 2002.

good stuff Scoob

I really think that marketshare (which in turn means even more Publisher suport and mind share) is a race to $199* and MS has made it their goal from day 1. *Assuming both machines have similar gaming capabilities.

Sony, conversely has chosen to go the
'more for your money' route.

It will be interesting to see how this plays out.

 

[Shifty Geezer]

Oh really? 'at least' as important?

Take a look at Nintendo vs Sony ~1995, and show me how mindshare is more important than price and game library. It's not.

PlayStation launch price : $300, N64 price = $200...

Neither did I say mindshare was more important than price and game library. I said it was as important. Having the mindshare and public profile doesn't guarentee success any more than being the cheapest console on the market or the console with the most games. It's still possible to make mistakes and lose out.

Anyone who dominates the public mindshare is going to have more leeway in the other criteria, but it's not a free ticket. You can't become a conceptual monopoly and then be complacent. However once you've got that public perception, it's like commanding the top of the hill - it's a defensible position. It's easier to defend than attack. As long as the PlayStation brand doesn't get nuked (like 3D gaming killing Amiga), and the assailants have to whittle away at the walls, they are not competiting on a level playing field. The actual dollar worth of that 'goodwill' is obviously have to pin down and I'm not going to try. But it's a factor that needs to be considered as well as price and software library. So far this idea of goodwill seems totally overlooked in these arguments.

 

[Tap In]

... So far this idea of goodwill seems totally overlooked in these arguments.

no doubt that Sony is holding a big fat fist full of mindshare collateral.

 

[pc999]

I still don't get the confusion, nor the refusal to admit that pricing is a factor in every purchase, all the moreso in non-essential items.

How many PS2s sold prior to $199 and at what rate, compared to how many have sold since then and at what rate?

It's not just MP3 players, it's every frivolous electronic device. The cheaper they are, they more they sell. Especially when they are of approximate value.

Has the console business model suddenly changed where companies now expect to make enough profit off of hardware sales? Is the model now that cost reductions will occur so rapidly that initial losses will be offset in the first year and also allow a price reduction immediately following? I doubt it.

, is this a backup of my ideas or a critic ? (if the second did you notice the Not).

BTW in Wii they may change the model with proffit right at launch.

 

[JasonLD]

PlayStation launch price : $300, N64 price = $200...

Neither did I say mindshare was more important than price and game library. I said it was as important. Having the mindshare and public profile doesn't guarentee success any more than being the cheapest console on the market or the console with the most games. It's still possible to make mistakes and lose out.

Anyone who dominates the public mindshare is going to have more leeway in the other criteria, but it's not a free ticket. You can't become a conceptual monopoly and then be complacent. However once you've got that public perception, it's like commanding the top of the hill - it's a defensible position. It's easier to defend than attack. As long as the PlayStation brand doesn't get nuked (like 3D gaming killing Amiga), and the assailants have to whittle away at the walls, they are not competiting on a level playing field. The actual dollar worth of that 'goodwill' is obviously have to pin down and I'm not going to try. But it's a factor that needs to be considered as well as price and software library. So far this idea of goodwill seems totally overlooked in these arguments.

N64 is basically perfect example of how the mindshare saves console from failing despite all the mistakes. From countless delays to sticking to catridge format...If N64 was made from any other company than Nintendo, it would have failed miserably.

 

[Sis]

I feel the 'race to $199' is a very valid point of discussion, because it will be a big source of demand down the line. But in the short-term, I think the larger story is that of the NES/Genesis-era gaming population 'coming of age.'

True. Also, I'm a big believer in the $200 price point as a product mover, but I often wonder if the truth is more simple: most products related to this discussion, such as consoles and DVD players, appear to sell the most once their price falls below $200 dollars simply because they spend the larger portion of their life sitting under $200. The PS2 numbers somewhat suggest this to be true, but honestly, it's very difficult to determine what would happen had we not seen a price drop. Though, we should be able to see if the recent PS2 price drop gives it a shot in the arm...

 

[RancidLunchmeat]

, is this a backup of my ideas or a critic ? (if the second did you notice the Not).

BTW in Wii they may change the model with proffit right at launch.

I was agreeing with your sentiments.

 

[RancidLunchmeat]

True. Also, I'm a big believer in the $200 price point as a product mover, but I often wonder if the truth is more simple: most products related to this discussion, such as consoles and DVD players, appear to sell the most once their price falls below $200 dollars simply because they spend the larger portion of their life sitting under $200.

Thats why one of the original metrics I wanted was not just sales but rate of sale.

The PS2 numbers somewhat suggest this to be true, but honestly, it's very difficult to determine what would happen had we not seen a price drop. Though, we should be able to see if the recent PS2 price drop gives it a shot in the arm...

Difficult? I'd say it's damn near impossible to determine what would have happened if we hadn't seen a price drop! But the decreasing sales figures prior to the drop and the increase of sales after the drop do indicate that at the very least the total sales figures would be lower. The question is how much lower?

 

[mckmas8808]

Thats why one of the original metrics I wanted was not just sales but rate of sale.



Difficult? I'd say it's damn near impossible to determine what would have happened if we hadn't seen a price drop! But the decreasing sales figures prior to the drop and the increase of sales after the drop do indicate that at the very least the total sales figures would be lower. The question is how much lower?

And to add to that, I remember talking to people on the net that believe that the "super magic price point was $99." To me it's interesting how Sony kept the price of the PS2 at $149, even though they could have easily dropped the price to $129 about a year ago.

At the end of the day if people aren't buying the PS3 fast enough it will force Sony to lower the price some. BUT if Sony manages to have a good sell through of shipments through the 2007 year don't expect to much of a price drop for a while.

Just look at the PSP. You (atleast me) would think that Sony would have dropped the price of the PSP value pack to $199 instead of stripping out the memory stick and extra stuff this year. A person like me would think that the price of the PSP this holiday season should be no more than $179, but will Sony do that? Probably not. Not if it keep selling the way it is.

 

[RancidLunchmeat]

At the end of the day if people aren't buying the PS3 fast enough it will force Sony to lower the price some.

I think the real question here is when the end of the day happens.

I think the end of the day is almost here for the 360. Now, it may have been extended by the PS3 pricing announcement. However, it also may arrive sooner depending on a Wii pricing announcement. (The interaction of both of those events, their expected delivery capacity and the proximity to the Holiday season are also all factors).

However, I still see the end of the day for the 360 as arriving very shortly after the Holday season, if not before. And that's at $299 and $399 price points.

Why? Because the majority who want to purchase one at those prices will have already done so. So they introduce price cuts to make it attractive to the $249 and $299 crowd (or whatever).

The question for Sony is when the end of the day for $499 and $599 versions happens, and then where they go from there.

 

[cthellis42]

It's also very 'silly' to say that the $200 pricepoint is meaningless.

Consider that in the 4months prior to the PS2 pricecut it sold ~5 million units(~1million in the US), in the 4 months after the drop to $199 it sold ~10 millionunit (5million in the US). Still think it's meaningless? It then went on to sell nearly 10million from Sep-Dec that holiday season, smashing the previous years # of 5 million.

It's not meaningless. But it's more fair to say all price cuts are meaningful. Certainly all price cuts tend to be followed by a healthy surge in sales. What is not the case anymore is that "$199" has some mystical/magical property that guarantees healthy sales, makes you "win," and sells the bulk of your consoles. What will lowering your $400 console to $300 do? Sell more! $300 to $250...? Guess!

I'll grant that $199 is a more important price point than others, as it's had a longer and more recognized history among console users, so probably it will bump sales MORE than other price drops, but...

Last generation turned any such ideas about $199 on its' head.

 

[Sis]

It's not meaningless. But it's more fair to say all price cuts are meaningful. Certainly all price cuts tend to be followed by a healthy surge in sales. What is not the case anymore is that "$199" has some mystical/magical property that guarantees healthy sales, makes you "win," and sells the bulk of your consoles. What will lowering your $400 console to $300 do? Sell more! $300 to $250...? Guess!

I'll grant that $199 is a more important price point than others, as it's had a longer and more recognized history among console users, so probably it will bump sales MORE than other price drops, but...

Last generation turned any such ideas about $199 on its' head.

I would only add that the skeptic in me wonders if it's not so much the new price as it is the marketing behind the new price.

But, rationally, it seems that there are categories of people that are willing to spend X numbers of dollars on an entertainment device and the trick is compartmentalizing these consumers into appropriate buckets such that every price drop includes the maximum number of consumers. Going below $200 is just shorthand for saying, "the majority of consumers".

 

[cthellis42]

Those numbers are meaningless as the type of gamer I'm talking about is interested only in getting the best game library for as cheap as possible, which means they did not buy an XBOX last generation, but instead bought PS2.

So if you're going to do any numbers, do them on the PS2. How many of it's 100million units were sold below $200?

I already posted this in another thread.

Sony's sales pre-$199 (or equivalent) run over 40% in North America and Asia (mainly Japan, of course), and about 65% in Europe (though, as stated, it's harder to track).

Certainly the PS2 will sell more between now and the PS3 launch (and those sales totals are about two months off current), but I don't think it will knock those numbers down more than a few percent.

By the END of the entire PS2 generation it might reflect more like 20%, but that means we're talking over 242 million PS2 sales (90 NA/75 J/82+ E), which is rediculous.

 

[cthellis42]

I would only add that the skeptic in me wonders if it's not so much the new price as it is the marketing behind the new price.

But, rationally, it seems that there are categories of people that are willing to spend X numbers of dollars on an entertainment device and the trick is compartmentalizing these consumers into appropriate buckets such that every price drop includes the maximum number of consumers. Going below $200 is just shorthand for saying, "the majority of consumers".

It's an important price point still, but I don't place nearly as much importance as I would have in the past, and if it DID have genuine effects all by its' lonesome, the Cube would have far surpassed the Xbox in North America, the PS2 wouldn't have sold nearly as much (or held the prices it did), etc.

People expect to pay a good $200 minimum for a good handheld anymore (I'm not talking just consoles here, but MP3 players, cell phones, PDAs...), and they usually derive far less enjoyment from them. (More convenience, of course. )

Price discrepencies will have more of an effect, in my book, but those can be overcome with smart advertising and obviously-recognized value, and--of course--that everpresent "mindshare." In NA, the Xbox succeeded over the Cube despite a $50-100 gap at all times and Nintendo's enormous track record in that market because of obvious extras (and games), while the PS2 basically commanded whatever-the-hell price it wanted and Microsoft was forced to follow due to lead-in, mindshare, etc. (and games...)

I mention games, because of course in the end this market is ALWAYS about them. The beginning is usually more about a game, price points, and obvious hardware advantages/disadvantages, but years in (and sometimes, after people already feel a generation has been "lost" or "won") it's about games en toto.

I feel it's more arguable that there's a "hard cap" not on the bottom end ("the race to $199") but at the top end. $500 certainly seems like a price point at which consumers are MUCH more apt to go and balk at purchases ("why, that's half a grand!"), which is why I figured Sony to aim for $399 starting systems and $499 "deluxe" systems, which would be mainly more compelling add-on bundles. People don't balk as much about those because they know what kind of follow-up purchases they're bound to make anyway...

The $499/$599 pill may be hard to swallow, especially with the competition very much underneath. Does Sony have enough HDTV substructure to lean on? Can they market the PS3 effectively between now and launch to let people know exactly what more they get? Will MS and Nintendo be able to capitalize on the price gap right out of the gates?

Sony doesn't have an easy climb with this--but it is not an unassailable one. For now I can only answer with a big shrug.

 

[scooby_dooby]

I already posted this in another thread.

Sony's sales pre-$199 (or equivalent) run over 40% in North America and Asia (mainly Japan, of course), and about 65% in Europe (though, as stated, it's harder to track).

Bogus.

Japan's first pricedrop was a 30% drop in Jun 2001, to date they had shipped 6million, which works out to about 25% of overall sales.

North america's first drop was a 30% drop in May 2002, they had sold 11.25million by then, worked out to ~25% of overall sales as well.

EU's first drop was a 30% cut in Sep 2001, to date they had sold 4.5million, works out to something like 12% of total sales.
http://en.wikipedia.org/wiki/PS2

So, in the various territories, 75-82% of the consoles were sold after the $199 or 'equivalent' pricepoint.
http://www.scei.co.jp/corporate/data/bizdataps2_e.html