Sony to drop PS2 price to $129???
- Thread starter bbot
- Start date
marconelly!
Veteran
Uh, never post anything from the site headed by REIROM. Don't ruin your own credibility 
<laughs>gurgi said:
As to the subject--doubtful. Certainly not right now. They'll go down to $150 at their own pace (unless Xbox's price drop hits them notably, which I don't offhand think it will, but if it should they'll drop earlier). Perhaps waiting as long as PSP's launch to help rolling the excitement about their platforms? <shrugs>
But going to $130 now would be foolish for them from since they're still leading by a ton. As much as I would love it to happen. Heh...
marconelly!
Veteran
Microsoft has always been very careful with their procedrops in the US, this would be the first time they actually dropped the price without prior 'invitation' by Sony. They seem to be way more price-conscious than their fans would like to give them credit for, implementing cost cutting measures left and right for the next Xbox, cancelling 2004 XSN as they wouldn't allocate enough money for two development teams... It would be beyond funny if Sony really does drop price to $130 after a month or so, and Microsoft is forced to follow so soon after they made a big fuss about their own price drop, and how they did it to show that 'they can lead'
Sure, MS is trying to patch up their losses, but they're still a financially incomparable institution within the industry and would see a price war with a competitor as an opportunity to squeeze them.
This dynamic between Sony and Microsoft is rather interesting. On the one hand, Sony is the dominating market figure with the power to set expectations - MS is discouraged from trying to undercut them too far in pricing for fear of casting Xbox as low-value. On the other hand, Sony, with their company-wide reliance on the PlayStation business, knows that the worse margins resultant from price dropping would be hurting themselves worse than MS would be hurt. So, both companies are discouraged from challenging the other in pricing.
As for Microsoft being cost-conscious with their next system and such, why wouldn't they save money where they could? A company tries ideally to be ambitious yet smart in their spending habits.
This dynamic between Sony and Microsoft is rather interesting. On the one hand, Sony is the dominating market figure with the power to set expectations - MS is discouraged from trying to undercut them too far in pricing for fear of casting Xbox as low-value. On the other hand, Sony, with their company-wide reliance on the PlayStation business, knows that the worse margins resultant from price dropping would be hurting themselves worse than MS would be hurt. So, both companies are discouraged from challenging the other in pricing.
As for Microsoft being cost-conscious with their next system and such, why wouldn't they save money where they could? A company tries ideally to be ambitious yet smart in their spending habits.
Lazy8s said:
Huh? I thought the conventional wisdom was that the X-box costs more to manufacture than the PS/2. Am I wrong then in my belief? The reason being MS can't drop the price of the HD (they include 20Gig ones now even though it only uses 8 ) and other components like that.
Lazy8s said:
If your assumption was true (that MS would love a price war with Sony) then why didn't they do it earlier? Fpr instance, when MS had plans to lower their price, Sony beat them to it stealing their thunder. Yet MS could have easily trumped them by doing it again but they didn't.
MS doesn't want to lose money in the arena more than anyone else. They will be happy with a solid second place as they know they are in it for the long run. More over getting a few more million X-boxes by the time X-box2 ships won't make a bit of difference as this console generation war has ended and the PS2 is by far the winner. Therefore I disagree with your assessment that MS wants a price war with Sony. It frankly doesn't do them any good at this point imo.
Price cuts usually coincide with a new retail or fiscal season (when they'll have the most effect), and a company tries to keep them spread out to avoid upsetting customers who might've just bought at a higher point and to avoid projecting the image that the product is being sold at clearance rates. Sony's only shown willingness to match Microsoft's pricing initiatives - not to undercut them in a game of Chicken with MSRPs. They'd happily sit by and let Microsoft devalue the Xbox brand if MS tried to cut prices too often or too far.
Lazy8s said:
Sony can do this because they've figured out (and their sales thus far have proven them correct) that they needn't under cut their competitor to still have greater unit sales.
Upon re-reading your first post I think I understand what you were trying to say. I think I mis-read your first post in that I thought you were implying that Sony couldn't engage in a console price war (PS2s cost too much to make) but instead you meant Sony shouldn't as they have little need to. At least I think I understand your position now.
I do disagree with your idea, however, that there is a fear about a low-price equates to low value. The value of a console is really in it's breadth and depth of titles, not how much the actual hardware costs. I think the average consumer understands that quite well (they go where the games are).
marconelly!
Veteran
Well, ultra-low price didn't exactly help Dreamcast sell much better in those months before Sega discontinued it, and it's not doing wonders for Gamecube either, right now. I think there's some truth in that perceptive de-evaluation.
It certainly gave Gamecube a bump, and continues to have residual increased rates in most markets, but indeed price drops don't automatically feed a ratio-wise equivalent in increased unit sales from the decrease in price. "Devaluing" is certainly a factor, which is one reason I'm surprised Microsoft opted for this maneuver, as it may not spur the sales they want, while simultaneously saying to some that "we're less valuable than the PS2" which is not an attitude I would expect to even be ALLUDED to from Redmond. Heh...marconelly! said:
The PS2 has held itself up well, so I figure will go down on their own schedule. Before three years were up, the PS1 was already at $150 (though the $130 drop wouldn't come for a year yet, if we transpose onto the PS2's timetable), but current machines have been holding longer and dipping less. They might do something in the summer (perhaps near E3), or might try holding until they have more premiere launches (PSP? GT4?) to correspond to...? We'll see, I guess.
marconelly! said:
Well the DC was dead long before the pricecuts were even announced as they had zero market inertia at that point.
As I mentioned before, the value of a console is in it's software library. The library for DC was pretty bleak and even the Gamecube suffers a bit from it I think ("The PS2 has the rad games man!"). Therefore the pricepoint of the console has to be lowered to the perceived value of the software available on it. For instance, if the Gamecube were lowered to $50 bucks,maybe it would sell a lot more because then people would weigh the cost of entry vs. the potential library games they would then have access to. In other words, I guess I view the cost of the hardware itself merely as a barrier to entry. But behind the barrier there has to be enough consumer interest in the software library for console to sell. If the library isn't interesting, then no pricecut short of extremes is going to help.
As an example, if a console you didn't own dropped its pricepoint to $50 bucks, would you not go through the thought process of considering the cost of the hardware ($50) vs. the 20 games you want to play on it?
No, but then again, just how many games does one have to buy FOR that system to make up for the amount they lose on the hardware sale? If they're uninterested enough to not consider a system until it gets down THAT low, they probably don't have all that many games they care about owning, either.Ty said:
It's yet another point, but not one that can be depended on to make up for lost hardware revenue.
cthellis42 said:
Whoa now, I am speaking about the fear of being perceived as low-value as a console manufactuer lowers the price of their hardware. It's got little to do with the financial repercussions of such a move. And I guarantee you would consider the library of software when considering whether or not the price of a console is too high for you to purchase one.
What consoles do you own? Before you bought them, did you consider what software was going to be available on it? Doesn't everyone say that it's the software that moves sales of consoles? What if Nintendo never released GC versions of Mario, Zelda, & Metroid games? Wouldn't that hurt the "value" of the Gamecube. Of course it would. Most people buy a console for the games on it, not just for the console itself.
cthellis42 said:
Then you agree with the "valuation" of a console. That it's not necessarily in the retail price of the console but rather the "value" of the games on it. Therefore what exactly is this fear about lowering the price point equates to being a low-value console?
cthellis42 said:
Again, this particular discussion point is not about whether or not it's a smart financial move for said console makers.
I agree that a very cheap price can give people the impression that a console is less worthy of a purchase then at a higher price. But then it can also make the console more attractive to buy simply because.. well its cheaper Which way it goes really depends on the situation the console is in. For instance if a console drops in price and not many games are being released for it or the console is rumoured to be dying then sales could get ever worse then before. Because it just reafirms that this is a sinking ship. But if it has a good lineup and seems generally solid then it will almost always be a positive thing for sales.
Which way it goes really depends on the situation the console is in. For instance if a console drops in price and not many games are being released for it or the console is rumoured to be dying then sales could get ever worse then before. Because it just reafirms that this is a sinking ship. But if it has a good lineup and seems generally solid then it will almost always be a positive thing for sales.Similar threads
