Sub $200 pricepoint - When will next-gen get there?
- Thread starter TheChefO
- Start date
serenity said:
Please read again.
Acert93 said:
Sony was the market leader of the PS2/Xbox/GCN generation. This generation Xbox 360 launched in "Year 1" and the PS3 is shipping in "Year 2" of the generation.
scoob said:
Just a small comment and Q. Most price cuts come in the Spring because it is right before the slow period of the year. Demand is typically highest in the fall. e.g. This fall I am sure Gears of War, Rainbow Six, Forza, Viva Pinata, and so forth will be driving a lot more demand than the Summer releases. Also 75% of retail sales are done from Thanksgiving to Christmas, sometimes more depending on the product.
I guess what I am saying is that IMO the only reason MS would cut its price right before the holidays is if demand was low. Then again it could be to nail Sony / compete with Nintendo, and who knows--maybe by then they will have reduced the price of 360 Core production that an extra $50 does not sting much. With your plan maybe MS would be making a serious attack on the VERY VERY important 2007 holiday.
That changes it then if thats the caseTheChefO said:MS owns the rights to the chips and chip designs from what I understand of their deals with ATI and IBM. They can choose who manufactures them and tweak the designs at will. They learned quite a bit from Sony last gen.
TheChefO said:Acert - I don't mean to be a pain but along with your previous posting of cost reductions for ps2/xbox/gamecube you wouldn't happen to have yearly sales figures or know where they could be found would you?
Thanks in advance - you're the man as always.
I just google. For the price drops I just put console name + price + price drop.
For sales, the pcvsconsole.com forums have a lot of sale information. Also a search here will yield a Sony document with year-by-year (month even?) sales of the PS2.
Sorry I don't have numbers off hand, but they are out there
Acert93 said:I just google. For the price drops I just put console name + price + price drop.
For sales, the pcvsconsole.com forums have a lot of sale information. Also a search here will yield a Sony document with year-by-year (month even?) sales of the PS2.
Sorry I don't have numbers off hand, but they are out there
Thanks for your help. Actually there was a thread earlier which had a sales data link, I'll check it out and your other listed sources. You're the man as always
scooby_dooby
Legend
wikipedia's always good for getting history on pricedrops, sales are harder
According to the link below (thanks Scoob), Sony sold roughly 3x as many ps2's at or below $200 in the US than above that price over the lifetime of ps2. Which breaks down to roughly:
25million @ <$200
8.5Million @ >$200
http://www.neogaf.com/forum/showthread.php?t=105508
higher priced sales -
With 360 selling the way it has in the states (~1.7 million) at a $300-400, the market does show some flexibility with early sales acceptance of higher prices, but sales are starting to become sluggish due to the relative software drought. Ps3 may be faced with a similar situation come this time next year.
Price drops -
Xbox1 trippled their sales figures when dropping their price to $200 as did ps2 in the following couple months. Some of this I'm sure is fueled by the price being just flat out cheaper than launch as it makes those that have waited, feel that their wait was somewhat worth it, but we(I) don't have a historical figure of a successful machine launching at anything more than $300. Sony may get these same sales jumps from dropping to $400-500 and $300-400.
Gifts -
One other interesting tidbit in these numbers though. You'll see that there is a vast sales peak once a year, every year for every machine in the list, Christmas. This means a very large chunk of these sales figures is parents/family buying these machines for gifts. There are sales at other parts of the year to but they are significantly overshadowed by "Under the tree" sales. When one factors this into the pricing equation it becomes apparant why this sub $200 price point is so important as a "gift" over this price becomes more and more difficult to justify no matter how much Johnny cries for his favorite toy.
Cpu -
Cell and xcpu should get some help with a move to 65nm late this year/early next. considered with mass manufacturing and ironing out the process the chips should cost 75 - 50% of what they are now. Cost unknown.
Gpu -
Same as above ^
Ram -
With ps3 using 700mhz gddr3 as well as 360 this should drive the price of that component down fairly quickly. Rambus ram is an unknown as there is a royalty attached to the raw costs but should come down in cost with Sony's vast orders. Cost unknown.
Hdd -
Cost should remain fairly constant above $30-40 through the lifecycle unless replaced with flash drives (cost unknown).
Dvd/Bluray
Dvd should remain fairly constant around $30 with Bluray dropping with mass adoption. Cost unknown but should be bottom limited similar to dvd +/- $10.
MB
ps3 motherboard is slightly more complex with both a rambus bus and gddr3 bus along with most other componentry being the same as 360. Cost unknown.
Misc components
Cost unknown.
I'm sure I'm missing a few things and perhaps you guys could help fill in the blanks.
My guesses:
PS3 if maintaining same specs as the $500 unit - it looks as though May, 2008 would be the earliest they could hit $200 based on a 65nm die shrink followed by a 45nm die shrink ~18months later. This is assuming Bluray adoption rates are high along with ps3 component sales up to this point. Realisticly I would say they would be comfortable hitting $300 at this point and $200 at this time the following year in 2009.
360 maintaining the same specs as the $300 core unit should be able to hit $200 by May 2007 (based on ps2 dropping to $200, 18months after a $300 launch).
25million @ <$200
8.5Million @ >$200
http://www.neogaf.com/forum/showthread.php?t=105508
higher priced sales -
With 360 selling the way it has in the states (~1.7 million) at a $300-400, the market does show some flexibility with early sales acceptance of higher prices, but sales are starting to become sluggish due to the relative software drought. Ps3 may be faced with a similar situation come this time next year.
Price drops -
Xbox1 trippled their sales figures when dropping their price to $200 as did ps2 in the following couple months. Some of this I'm sure is fueled by the price being just flat out cheaper than launch as it makes those that have waited, feel that their wait was somewhat worth it, but we(I) don't have a historical figure of a successful machine launching at anything more than $300. Sony may get these same sales jumps from dropping to $400-500 and $300-400.
Gifts -
One other interesting tidbit in these numbers though. You'll see that there is a vast sales peak once a year, every year for every machine in the list, Christmas. This means a very large chunk of these sales figures is parents/family buying these machines for gifts. There are sales at other parts of the year to but they are significantly overshadowed by "Under the tree" sales. When one factors this into the pricing equation it becomes apparant why this sub $200 price point is so important as a "gift" over this price becomes more and more difficult to justify no matter how much Johnny cries for his favorite toy.
Cpu -
Cell and xcpu should get some help with a move to 65nm late this year/early next. considered with mass manufacturing and ironing out the process the chips should cost 75 - 50% of what they are now. Cost unknown.
Gpu -
Same as above ^
Ram -
With ps3 using 700mhz gddr3 as well as 360 this should drive the price of that component down fairly quickly. Rambus ram is an unknown as there is a royalty attached to the raw costs but should come down in cost with Sony's vast orders. Cost unknown.
Hdd -
Cost should remain fairly constant above $30-40 through the lifecycle unless replaced with flash drives (cost unknown).
Dvd/Bluray
Dvd should remain fairly constant around $30 with Bluray dropping with mass adoption. Cost unknown but should be bottom limited similar to dvd +/- $10.
MB
ps3 motherboard is slightly more complex with both a rambus bus and gddr3 bus along with most other componentry being the same as 360. Cost unknown.
Misc components
Cost unknown.
I'm sure I'm missing a few things and perhaps you guys could help fill in the blanks.
My guesses:
PS3 if maintaining same specs as the $500 unit - it looks as though May, 2008 would be the earliest they could hit $200 based on a 65nm die shrink followed by a 45nm die shrink ~18months later. This is assuming Bluray adoption rates are high along with ps3 component sales up to this point. Realisticly I would say they would be comfortable hitting $300 at this point and $200 at this time the following year in 2009.
360 maintaining the same specs as the $300 core unit should be able to hit $200 by May 2007 (based on ps2 dropping to $200, 18months after a $300 launch).
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TheChefO said:
A good planing can overcome this.
It had happen to me
.And there is many wanting a nextgen console the first to hit the lower price will probably sell a lot.
Very good point. And for one side it justify my point (this is here the big money) if they have the suply, on the other side lack of SW can make this point moot as sell little for many months can hurt their proffit to much.
Althought, like I said above, with good planing they can overcome this with high profile titles for the mass market, things like H3 on March (+film) and GTA4 on May/June etc... that could really make them sell the machine but it would increase greatly their sales if they are near 200$ and this way increase the overall suport from devs/brand recognition/market share and in the mass market this lead again for more sales.
This is true for both 360/PS3
Further analysis of the US sales numbers:
Total PS2 sales 12 months prior to their $200 pricepoint in the us were approximately 6.5 million units. Total sales 12 months after the $200 pricepoint jumped to approximately 9 million units. This sales period was also the strongest total sales period of the ps2's lifecycle in the US and the sales numbers have been sliding ever since. The following 12 month period was 6 million units. Following that was 5.5 million units. Most recently from May 2005 to May 2006 was 5 million units.
Do any of you know where worldwide sales numbers can be attained?
edit - found it ...
Total PS2 sales 12 months prior to their $200 pricepoint in the us were approximately 6.5 million units. Total sales 12 months after the $200 pricepoint jumped to approximately 9 million units. This sales period was also the strongest total sales period of the ps2's lifecycle in the US and the sales numbers have been sliding ever since. The following 12 month period was 6 million units. Following that was 5.5 million units. Most recently from May 2005 to May 2006 was 5 million units.
Do any of you know where worldwide sales numbers can be attained?
edit - found it ...
Last edited by a moderator:
Worldwide sales
PS2___________XBOX
2000 06.40 $300 2000
2001 18.50 $300 2001 1.5 $300 ps2 sales advantage of 23.5million
2002 24.40 $200 2002 6.5 $200 ps2 sales advantage of 42million
2003 19.87 $180 2003 5.7 $180
2004 11.93 $150 2004 6.2 $150
2005 19.98 $130 2005 4.1 $130
Potential next gen sales:
XBOX360______PS3
2005 01.5 $300 2005
2006 08.5 $300 2006 03.0 $500 potential xbox360 sales advantage of 7million
2007 16.0 $200 2007 12.0 $400 potential xbox 360 sales advantage of 11million
2008 24.0 $180 2008 24.0 $300
2009 20.0 $150 2009 20.0 $200
2010 20.0 $130 2010 20.0 $180
2011 20.0 $100 2011 20.0 $150
http://forum.pcvsconsole.com/viewthread.php?tid=18926
When looking at the above sales numbers it becomes readily appearant that publishers/developers chose ps2 over xbox very early on as their install base was at 25million worldwide by the time 2001 was over, while xbox had just begun with 1.5 million.
Contrasting this with 360 and ps3 situation we see a likely outcome which puts MS in a much more desirable position from a developer standpoint than they were last gen. Last gen by the time ms had a console on the shelf, the "war" was over. This gen, by the time Sony has a system on the shelf, Ms will have a 7 million console lead. While this lead is not impossible to overcome it presents developers with a much more balanced choice when developing their games and targets for their potential game sales. By the time 2008 rolls around, based on reasonable projections, 360 should be sitting around the 26million range while ps3 manufacturing 1 million units a month and selling at the same rate would be at 15million units.
These numbers are of course forecasted and not factual as it is impossible to predict the future but I feel they are reasonable based on manufacturing limitations and perceived consumer demand. When taking them in context of potential different outcomes from last gen, it's easy to see why most developers are taking a multiplatfform approach to their game targets as by default the market will be a lot closer than it was last gen based on nothing more than time/manufacturing ability, regardless of demand. This new developer approach will help level the playing field and lead to consumers deciding less and less on what games they want on what system and more on pricing. While there will still be exclusive "system movers" that dictate a certain amount of sales, the frequency of these titles and consequently units sold due to them, will be significantly less than last gen.
PS2___________XBOX
2000 06.40 $300 2000
2001 18.50 $300 2001 1.5 $300 ps2 sales advantage of 23.5million
2002 24.40 $200 2002 6.5 $200 ps2 sales advantage of 42million
2003 19.87 $180 2003 5.7 $180
2004 11.93 $150 2004 6.2 $150
2005 19.98 $130 2005 4.1 $130
Potential next gen sales:
XBOX360______PS3
2005 01.5 $300 2005
2006 08.5 $300 2006 03.0 $500 potential xbox360 sales advantage of 7million
2007 16.0 $200 2007 12.0 $400 potential xbox 360 sales advantage of 11million
2008 24.0 $180 2008 24.0 $300
2009 20.0 $150 2009 20.0 $200
2010 20.0 $130 2010 20.0 $180
2011 20.0 $100 2011 20.0 $150
http://forum.pcvsconsole.com/viewthread.php?tid=18926
When looking at the above sales numbers it becomes readily appearant that publishers/developers chose ps2 over xbox very early on as their install base was at 25million worldwide by the time 2001 was over, while xbox had just begun with 1.5 million.
Contrasting this with 360 and ps3 situation we see a likely outcome which puts MS in a much more desirable position from a developer standpoint than they were last gen. Last gen by the time ms had a console on the shelf, the "war" was over. This gen, by the time Sony has a system on the shelf, Ms will have a 7 million console lead. While this lead is not impossible to overcome it presents developers with a much more balanced choice when developing their games and targets for their potential game sales. By the time 2008 rolls around, based on reasonable projections, 360 should be sitting around the 26million range while ps3 manufacturing 1 million units a month and selling at the same rate would be at 15million units.
These numbers are of course forecasted and not factual as it is impossible to predict the future but I feel they are reasonable based on manufacturing limitations and perceived consumer demand. When taking them in context of potential different outcomes from last gen, it's easy to see why most developers are taking a multiplatfform approach to their game targets as by default the market will be a lot closer than it was last gen based on nothing more than time/manufacturing ability, regardless of demand. This new developer approach will help level the playing field and lead to consumers deciding less and less on what games they want on what system and more on pricing. While there will still be exclusive "system movers" that dictate a certain amount of sales, the frequency of these titles and consequently units sold due to them, will be significantly less than last gen.
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There's also the "ipod effect".
..charging a premium price for technology that doesn't warrant the price to maintain its hip factor. I think that was a factor for the Gamecube last gen. People saw the significantly lower price and opted for a ps2 or xbox thinking the gamecube was technological inferioir. MS would be smart not to drop the price too quickly. They will have an impressive library this holiday to combat sony. I do think a $249 core and $349 premium pricepoint would do them well for xmas season 2006 though. Many moms would be comfortable getting that for junior compared to a $499/$599 sony choice. Its also not cheap enough scare away someone treating themselves to a luxury type item.
I hope that makes sense.. I know its a bit contradictory.
..charging a premium price for technology that doesn't warrant the price to maintain its hip factor. I think that was a factor for the Gamecube last gen. People saw the significantly lower price and opted for a ps2 or xbox thinking the gamecube was technological inferioir. MS would be smart not to drop the price too quickly. They will have an impressive library this holiday to combat sony. I do think a $249 core and $349 premium pricepoint would do them well for xmas season 2006 though. Many moms would be comfortable getting that for junior compared to a $499/$599 sony choice. Its also not cheap enough scare away someone treating themselves to a luxury type item.
I hope that makes sense.. I know its a bit contradictory.
scooby_dooby
Legend
The IPOD effect has more to do with it being the best solution on the market more than it's high price. I've been looking for something comparable to IPOD for a long time, very few products compare.
scooby_dooby said:
Maybe that wasn't the best example, but I was referring to there being cheaper mp3 players in the past with the same capacity and similar build quality. However my college aged ex-girlfriend wouldn't be caught dead on her campus wearing anything else. Then it becomes less about function and more a fashion type accessory/status symbol. But i see your point on newer gen video ipods. My point was more about prices reflecting a quality perception.
scooby_dooby
Legend
Pozer said:
Well...you know girls
It has become an icon though, imagine how many ipods must be on the bus when a proffessional sports team travels, it's probably some ridiculous number.
I dont believe the PS3 or Xbox 360 will hit sub $200 (if ever in the PS3's case) till the last year of life cycle (talking the "premium" package here, read: the only one people will honestly want).
I think at the end of the life cycle we could see:
PS3 - $250 ~ $300.
Xbox 360 - $200
Wii - $75
I think Sony may be able to do the $250, just because as time goes by I believe the Blu-Ray drive price will go way down. Though as the end of the life reaches you want to stop losing money and break even or actually gain.
The pressure both the 360 and PS3 have to face is the fact that they include hard drives. This will somewhat limit their minimum price.
I believe the Wii over its lifetime will be able to see amazing big drops in the actual consoles cost to build. In fact, by the end of its lifetime I believe the main cost factor to Nintendo will be the controller, which relies (from my understanding) on a decent amount of moving parts (expensive).
As for the iPod effect, I agree. Lots of times you can create a image for yourself just by charging more. I think that did effect the Gamecube the last generation, but I think Nintendo marketing really did nothing to change this view. As everyone knows, the Gamecube, technology wise, was an amazing value and as a console really had the potential to destory both the Xbox and PS2, sadly it ended up bad for Nintendo.
I believe the iPod is a valid choice for such an effect. Its increasingly become a terrible solution because of the properitary nature of it now and complete lack of features to other DAPs. Though its become an iconic symbol and therefore it continues to dominant the market because of the position Apple put it in. Apple's handling of the iPod is a perfect example of good marketing, not of a good product. (IMO)
I think you can easily curve the iPod effect though. I think Nintendo has learned how to do this with the Nintendo DS. By not marketing it as the best in technology, but marketing it as a special device that enables new types of gameplay. Its a unique device and that's its draw. If Nintendo can do the same with the Wii then they'll have a very big success on their hands.
I think at the end of the life cycle we could see:
PS3 - $250 ~ $300.
Xbox 360 - $200
Wii - $75
I think Sony may be able to do the $250, just because as time goes by I believe the Blu-Ray drive price will go way down. Though as the end of the life reaches you want to stop losing money and break even or actually gain.
The pressure both the 360 and PS3 have to face is the fact that they include hard drives. This will somewhat limit their minimum price.
I believe the Wii over its lifetime will be able to see amazing big drops in the actual consoles cost to build. In fact, by the end of its lifetime I believe the main cost factor to Nintendo will be the controller, which relies (from my understanding) on a decent amount of moving parts (expensive).
As for the iPod effect, I agree. Lots of times you can create a image for yourself just by charging more. I think that did effect the Gamecube the last generation, but I think Nintendo marketing really did nothing to change this view. As everyone knows, the Gamecube, technology wise, was an amazing value and as a console really had the potential to destory both the Xbox and PS2, sadly it ended up bad for Nintendo.
I believe the iPod is a valid choice for such an effect. Its increasingly become a terrible solution because of the properitary nature of it now and complete lack of features to other DAPs. Though its become an iconic symbol and therefore it continues to dominant the market because of the position Apple put it in. Apple's handling of the iPod is a perfect example of good marketing, not of a good product. (IMO)
I think you can easily curve the iPod effect though. I think Nintendo has learned how to do this with the Nintendo DS. By not marketing it as the best in technology, but marketing it as a special device that enables new types of gameplay. Its a unique device and that's its draw. If Nintendo can do the same with the Wii then they'll have a very big success on their hands.
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scooby_dooby
Legend
"talking the "premium" package here, read: the only one people will honestly want"
There's absolutely no evidence to believe that people will not want the core package if it was priced more reasonably.
100million people where just fine witha 'core' ps2 last generation.
There's absolutely no evidence to believe that people will not want the core package if it was priced more reasonably.
100million people where just fine witha 'core' ps2 last generation.
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