Sub $200 pricepoint - When will next-gen get there?

Skrying said:
I had no idea there was such thing as the core PS2 last generation. Could you tell me what the "core" PS2 was last generation?

A game system with a memory card. Pretty basic concept.

I don't understand this assumption that 100% of people now consider a HDD 'must have.' Why would this be the case? Consumers didn't exactly flock to XBOX because it had a HDD installed last generation.

As the Core becomes priced diferently and as price drops the casual consumer levels, we could see a totally different ratio of premium vs core. Do you really think a $199 or $149 core system wouldn't sell? All they have to do is buy memory card and they have a 360, this also the exact same price range that PS2 enjoyed it's greatest success. $199 + memory card.
 
scooby_dooby said:
I don't understand this assumption that 100% of people now consider a HDD 'must have.' Why would this be the case? Consumers didn't exactly flock to XBOX because it had a HDD installed last generation.

As the Core becomes priced diferently and as price drops the casual consumer levels, we could see a totally different ratio of premium vs core. Do you really think a $199 or $149 core system wouldn't sell? All they have to do is buy memory card and they have a 360, this also the exact same price range that PS2 enjoyed it's greatest success. $199 + memory card.

HDD probably become very important because of (mainly free?) download content.

But I agree that the Core would sell we if it does have a good price.
 
scooby_dooby said:
A game system with a memory card. Pretty basic concept.

I don't understand this assumption that 100% of people now consider a HDD 'must have.' Why would this be the case? Consumers didn't exactly flock to XBOX because it had a HDD installed last generation.

As the Core becomes priced diferently and as price drops the casual consumer levels, we could see a totally different ratio of premium vs core. Do you really think a $199 or $149 core system wouldn't sell? All they have to do is buy memory card and they have a 360, this also the exact same price range that PS2 enjoyed it's greatest success. $199 + memory card.

What? First off, in order for their to be a core package, there must be another different package of the some product but including non-esential features that are physical to the product. Memory card included does not seperate between "core" and "premium" to me.

The reason why a HDD is considered a must have is because more than one console has one, and in the case of the PS3 both versions have it. Therefore people see it as a must have, market perception.

The core system will never vary greatly from the premium in price. They share 95% of the same exact hardware, and the additions in the premium package are rather easy to justify through price. Therefore more people rather have the premium package.
 
Skrying said:
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).

The Core is aimed at price conscious consumers. There are consumers who would choose a $99 Core with small memory card over a $199 version with HDD. (Of course MS will need to stop milking the memory card to high heaven by then...)

Outside of online DLC (trailers, demos, XBLA, expansions, bug fixes, etc -- all extra services outside playing games) the HDD has not done much yet outside of caching, which is optional.

So for the mom or dad who see Halo 3 or GTA4 or whatever game their kids want and just want a cheap present for a birthday or holiday they can get a console with the games they want. It may lack some features, but the point is some consumers will do without extra features--they just want to play games cheaply. (Btw, some statistic was put out there showing that some insanely crazy number of consumers never even used memory cards...)

Bottom line is the Core is not ment for early adopters or enthusiests. It is targetting the very price conscious consumers down the road. Nothing in last gens sales or those before that indicate MS or Sony can hit the 100M consumer mark without getting below $200 for a substantial period of time.

PC999 said:
HDD probably become very important because of (mainly free?) download content.

It may be important -- but only to 50% of the market. MS claims ~50% online rate. They are estimating 6M users by E3 2007. Using their own install base numbers, they should have ~12M+ consumers by then. Again, 50% or less.

So one of the biggest reasons to have a HDD is only available to ~50% of the userbase. This is one area the US holds things back due to the spotty broadband in many areas.
 
Skrying said:
The reason why a HDD is considered a must have is because more than one console has one, and in the case of the PS3 both versions have it.

You don't know that. It could very well be the lack of a HDD in the Wii and the Core -- and the MS stance that ALL* games must work without a HDD (* until a game comes along that requires it hehe) -- make a HDD an extra that most games only superfiscially used. Every Xbox had a HDD, and it did not go far. This gen only the PS3 has a HDD standard. It will probably see more use mainly due to advancements in media and size (TiVo, Linux OS, creater penetration of Broadband, etc) but seeing as MOST games are multi-platform they cannot afford to alienate users.

As much as I love a HDD, there is very little content that is "must have" that requires a HDD.

Therefore people see it as a must have, market perception.

That doesn't always hold water -- especially when you are talking a $200+ difference. e.g. Little Johny wants GTA4 for Christmas. (Single?) Mom has to choose:

• PS3 with 20GB HDD = $499
• Xbox 360 Core = $299

Does she use the $200 difference on something else (other gifts? rent? food?) or does she get a feature that is an extra? If the games Johny wants don't require a HDD why get one?

Toss in that Johny does not have broadband and a slew of HDD-friendly features are now no longer relevant.

The core system will never vary greatly from the premium in price.

The Xbox 360 with a HDD is $100 more than the Core version, or a 33% price hike. Argue semantics all you want, but 33% and $100 is a bit of money.

They share 95% of the same exact hardware, and the additions in the premium package are rather easy to justify through price.

Yet there are a lot of factors that make those justifcations difficult.

* I don't have broadband
* The big games (e.g. GTA4) are on both systems and work without the HDD

So on and so forth. That brings price back into focus. Yes, some consumers will want the pimped-out SKU. But trivializing a cheaper SKU that plays the games people want is a complete misperception of the market and history IMO.

Therefore more people rather have the premium package.

I would rather have a 2006 model sports car never driven off the lot. But getting a nice, loaded sports car is not in my budget. Getting a no-frills commuter is in my budget.

What people would rather have and what people can afford and justify are two different things.
 
Acert93 said:
It may be important -- but only to 50% of the market. MS claims ~50% online rate. They are estimating 6M users by E3 2007. Using their own install base numbers, they should have ~12M+ consumers by then. Again, 50% or less.

So one of the biggest reasons to have a HDD is only available to ~50% of the userbase. This is one area the US holds things back due to the spotty broadband in many areas.


In 360 there is only two other reasons for it being important, one is caching/persistent worlds (like Halo) but that will probably be very little used because here is a core without HDD. The other (and main in XB case IMO) is that the XB core/premium versions does have a real bad price system that make the core a real bad thing, if that isnt the case we would probably see much more cores in the market.
 
Skrying said:
What? First off, in order for their to be a core package, there must be another different package of the some product but including non-esential features that are physical to the product. Memory card included does not seperate between "core" and "premium" to me.

Obviously there was only one version of PS2. What I meant was, in principal it was equal to the core 360, just the console and you had to buy a memory card seperately. And consumers lapped it up as soon as it hit 199. You assertion that 'no-one' would be interested in htis configuration of xbox360 is baseless.

Skrying said:
The reason why a HDD is considered a must have is because more than one console has one, and in the case of the PS3 both versions have it. Therefore people see it as a must have, market perception.

Do you have some studies of the current market perception? This is your opinion, nothing more.

Skrying said:
The core system will never vary greatly from the premium in price. They share 95% of the same exact hardware, and the additions in the premium package are rather easy to justify through price. Therefore more people rather have the premium package.

And you know this how? HDD and Component cables alone will most likely be >$100 for the life of the console.

You're being rather silly, MS didn't make the HDD external so they could have a gimped core edition for the life of the console, they did it so they could get their console down to $199 ASAP. Core is gimped now because of a very lopsided pricing structure and the fact it's being marketed to hardcore gamers who buy within year 1 of a console launch. When it comes time to target the mainstream, at $199, my bet is the core will sell extremely well.

There is no reason to believe that HDD has become an essential item for a console. Even in MS's best estimates they're aiming for 6million Live! subscribers by next year, only 50% of their userbase which consists of many early adopters. Half of their gamers won't even be online, so why do they need a HDD?
 
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Viewing sales by year according to price alone does not necessarily paint a complete picture. While that data alone indicates that a significant portion of the console's userbase came only after the $200 mark, it ignores other factors which may have been contributed to the sales volume, namely games. With that in mind, using GameRankings, and the data posted by TheChefO, I've added how many titles in each of those years are rated at 80% or higher (viewed by year of release, avg of "main sites" and with at least 15 reviews).

PS2_________________________XBOX
2000 / 06.40 / $300 / 8 Titles ---
2001 / 18.50 / $300 / 37 Titles --- 2001 / 1.5 / $300 / 14 Titles
2002 / 24.40 / $200 / 55 Titles --- 2002 / 6.5 / $200 / 38 Titles
2003 / 19.87 / $180 / 60 Titles --- 2003 / 5.7 / $180 / 53 Titles
2004 / 11.93 / $150 / 58 Titles --- 2004 / 6.2 / $150 / 49 Titles
2005 / 19.98 / $130 / 45 Titles --- 2005 / 4.1 / $130 / 49 Titles

This data, is of course, far from conclusive, and tries to illustrate quality over quantity. Meaning, just because the game ranked well, doesn't mean it sold well. Conversely, using the top sold games could also be misleading since a hit title coming out when there is a 10 m userbase obviously has the potential to sale more than a hit titled released with a 5 million userbase. Then again, a hit title released earlier also has the potential to sell for a longer period of time. Nonetheless, even with the problems with this data, I think it at least illustrates that a large percentage of the some of the "higher quality" titles come out after the systems hit the $200 price mark.

That said, its rather difficult to draw much in the way of conclusions from, mainly because the $200 mark was reached only 1 - 2 years after launch, and we obivously have a lot more data regarding the years after the $200 price point. Focusing strictly on the 3 year period of pre, during and post $200 (2001, 2002, 2003), there's still a very large descripency between the number of highly regarded titles released, all in favor of coming out during and after the $200 drop. Which further illustrates my point, since I think it would be difficult to say that the price alone contributed to the sale increase, or even that the price was the most significant factor. I would argue that it was definately one of the most significant, but would rank the quality of games available equally as important. I would even go so far as to say that without the quality titles there, after the initial sales spike due to the price drop, sales would have faltered greatly (comparatively speaking). That's just my speculation.

Something that does stand as a strong counter point to my argument, however, is the fact that in 2001, the year prior to price drop, the PS2 saw the release of GTAIII, GT3, and MGS2. I don't think there was another year that 3 titles of that magnitude were released, yet hardware sales were at least 1 million higher than 2001's in every subsequent year except for 2003.

So for the mom or dad who see Halo 3 or GTA4 or whatever game their kids want and just want a cheap present for a birthday or holiday they can get a console with the games they want. It may lack some features, but the point is some consumers will do without extra features--they just want to play games cheaply.

This is, of course, assuming neither one of those titles requires the hard drive, as at least a couple of titles do already, not even a year after launch (Football Manger 2006, FFXI). I can see an argument as to why Halo may or may not require the HDD. It could potentially alienate a % of the market, hurting sales. Conversely, to accommodate non HDD equipped systems, they might have to compromise their vision of the game beyond what is acceptable to them (just speculating). I can see a much stronger case for GTA requiring the HDD since it knows it can enjoy the sales of 2 of 3 target platforms which have HDDs standard (PC and PS3).
 
scooby_dooby said:
Half of their gamers won't even be online, so why do they need a HDD?

One could argue for backwards compatibility, but "need" would be used rather loosely in such an argument. The problem being there is very little data regarding the use of BC, beyond a layer of comfort for consumers and publishers. On a side note, Next-Gen has a nice article regarding BC.

Oh, and of course, for the games that require the HDD. Should more arise.
 
Gradthrawn said:
Viewing sales by year according to price alone does not necessarily paint a complete picture. While that data alone indicates that a significant portion of the console's userbase came only after the $200 mark, it ignores other factors which may have been contributed to the sales volume, namely games. With that in mind, using GameRankings, and the data posted by TheChefO, I've added how many titles in each of those years are rated at 80% or higher (viewed by year of release, avg of "main sites" and with at least 15 reviews).

PS2_________________________XBOX
2000 / 06.40 / $300 / 8 Titles ---
2001 / 18.50 / $300 / 37 Titles --- 2001 / 1.5 / $300 / 14 Titles
2002 / 24.40 / $200 / 55 Titles --- 2002 / 6.5 / $200 / 38 Titles
2003 / 19.87 / $180 / 60 Titles --- 2003 / 5.7 / $180 / 53 Titles
-2004 / 11.93 / $150 / 58 Titles --- 2004 / 6.2 / $150 / 49 Titles
2005 / 19.98 / $130 / 45 Titles --- 2005 / 4.1 / $130 / 49 Titles

Great post - good points

Adding "games available" to the mix is a crucial element to telling the whole story as well. This also illstrates my point above about developer targets and why the situation turned out as it did on ps2 v xbox v gc, with ps2 getting the vast majority.

For these reasons I illustrated above, I expect the ps3 to not repeat anywhere near the success of ps2 based on:
-loss of exclusives because of
-360 installed base which will grow exponentially because of
-significantly lower pricepoint compared to ps3 and
-Launching 1 year ahead of ps3 worldwide

The exclusives will not neccesarily be big name titles. More significantly I expect a lot of the smaller nitch titles to go multiplat. Depending on how successful MS is at wooing the Japanese developers to bring their games to 360 I would expect those nitch titles from smaller devs to go multiplat to either 360 or Wii.

Game selection significance on installed base is huge as it becomes a snowball effect of games-gamers-games-gamers. How the pricepoint plays into the equation is illustrated in your 2001/2002 example of bringing in gamers by the low pricepoint and them following up with game purchases of budget titles by then and picking up the new hits when they are released.

Realisticly I think they best Sony can hope for this gen is 40% of the market based on:
-their inability to hit the $200 pricepoint until 2009 at the earliest
-lower units sales based on the initially high price
-less exclusives based on developers having the option of choosing their competitors with larger/same userbase that will likely only overlap with Wii. (in otherwords most ps3 users will not be 360 users)
 
TheChefO said:
For these reasons I illustrated above, I expect the ps3 to not repeat anywhere near the success of ps2 based on:
-loss of exclusives because of
-360 installed base which will grow exponentially because of
-significantly lower pricepoint compared to ps3 and
-Launching 1 year ahead of ps3 worldwide
TheChefO said:
Realisticly I think they best Sony can hope for this gen is 40% of the market based on:
-their inability to hit the $200 pricepoint until 2009 at the earliest
-lower units sales based on the initially high price
-less exclusives based on developers having the option of choosing their competitors with larger/same userbase that will likely only overlap with Wii. (in otherwords most ps3 users will not be 360 users)
Interesting theory, BTW what do you think about the influence of Blu-ray in PS3?
 
one said:
Interesting theory, BTW what do you think about the influence of Blu-ray in PS3?


As a high-end media format (which it is right now) you could compare it's adoption rate to 1998 dvd introduction as a best case scenario. I don't think it will be quite the firestorm dvd was though at that time as the media it is attempting to replace is largely satisfactory at the moment and there is a competing high-end format currently as well.

Long story short, if it does play a role it won't be until a few years down the road and by that time this generation will have already been defined.
 
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I think a lot of former teenagers who had a PS2 originally and are now wage earners and have many PS2 games will buy the PS3 because of it's BC, particularly if PS2 games look better due to AA or other enhancements. BC may not be put to use that much in practice, but psychologically I think it is a big factor in choosing a console. There are about 100 million PS3 owners, and that is not a small number.

I also think that XBox360 will lose sales at the low cost end to Wii being cheaper.

I also think that cutting price is not automatically going to translate into sales. XBox1 's sales spiked sharply every time the price was cut, but they dropped again after the spike. The PS2 was more expensive (and arguably lower spec'ed) than XBox1 for most of it's life, but the PS2 consistently sold twice as many. Nintendo GC was also lower spec'ed and Nintendo never bothered to subsidise the GC, but it still sold almost as many as the XBox1.
 
Acert93 said:
You don't know that. It could very well be the lack of a HDD in the Wii and the Core -- and the MS stance that ALL* games must work without a HDD (* until a game comes along that requires it hehe) -- make a HDD an extra that most games only superfiscially used. Every Xbox had a HDD, and it did not go far. This gen only the PS3 has a HDD standard. It will probably see more use mainly due to advancements in media and size (TiVo, Linux OS, creater penetration of Broadband, etc) but seeing as MOST games are multi-platform they cannot afford to alienate users.

As much as I love a HDD, there is very little content that is "must have" that requires a HDD.

The Wii is not competeing against the Xbox 360 and PS3, the Wii's goal is to be the second console. The one everyon ends up buying because its so cheap compared to the others, it matters extremely little if the Wii has a HD or not, people dont care if it does.

People expect the Xbox 360 to have an HD, I know many who were surprised to hear the core version had no HD. They figured since the first Xbox had one in all consoles then at the very least all 360's could have one.

Sony being able to say all versions have an HD in the PS3 is a big deal. Market perception and mind share play a big role in sales, even if only half the users ever use it more than on a regular basis.



Acert93 said:
That doesn't always hold water -- especially when you are talking a $200+ difference. e.g. Little Johny wants GTA4 for Christmas. (Single?) Mom has to choose:

• PS3 with 20GB HDD = $499
• Xbox 360 Core = $299

Does she use the $200 difference on something else (other gifts? rent? food?) or does she get a feature that is an extra? If the games Johny wants don't require a HDD why get one?

Toss in that Johny does not have broadband and a slew of HDD-friendly features are now no longer relevant.

Wrong comparison. Its $300 Xbox 360 core, or $400 Xbox 360 premimum. That's a $100 difference. She will go with the cheapest solution that makes Little Johnny (who's actually old enough to cause a LOT of pain) happy. To little Johnny it doesnt matter if he'll ever use that HD, it just matters that he has one.

You're also thinking that Little Johnny's mother is a smart consumer and knows that Little Johnny wont use the HD. Generally the parent buys what the kid says to buy, and tries to follow that to the detail, or else Little Johnny turns into Mean Little Johnny.

scooby_dooby said:
Obviously there was only one version of PS2. What I meant was, in principal it was equal to the core 360, just the console and you had to buy a memory card seperately. And consumers lapped it up as soon as it hit 199. You assertion that 'no-one' would be interested in htis configuration of xbox360 is baseless.

No it is not the same principle. There was no premium version. Therefore you had only one choice, so you went with it. So you went with the ONLY version when it got to your budget, this is very different from when you have two versions, many people might hold off even longer till the premium version drops price, or maybe not. There's many different things that can happen when you throw in an entire different version of the same console.
 
one said:
Interesting theory, BTW what do you think about the influence of Blu-ray in PS3?


There is muliple ways to look at that, one can easly say that it will not matter as much as the DVD in PS2 as less people will have HDTVs (we probably saw almost 4 years till DVDs become a really mass market thing), or simple how much is BR/HD DVD or even HDTVs acceptance in general (which I expect to be lower), other point to consider is how much will cost a 360+HD DVD.

Personally I think that it will not have a big effect in the market of sub 200$.
 
TheChefO said:
Great post - good points

Realisticly I think they best Sony can hope for this gen is 40% of the market based on:
-their inability to hit the $200 pricepoint until 2009 at the earliest
-lower units sales based on the initially high price
-less exclusives based on developers having the option of choosing their competitors with larger/same userbase that will likely only overlap with Wii. (in otherwords most ps3 users will not be 360 users)

Thank you.

I agree, exclusives for the Playstation will not be as abundant as they were last round. Phil Harrison concurs, as he has stated that they will have to rely on 1st party titles to distinguish themselves:

GamesIndustry.biz
That said, I think that with some exceptions, first party will probably be the majority of the exclusives on PlayStation 3. It's just the reality of the world that we live in - and it was very kind of Microsoft to announce one of those [multi-platform titles] for us.

However, I think it is important to keep in mind the development of titles before the price announcement. Coming out of last gen, I'm guessing a large majority of developers focused on the PS3 as their target next-gen platform, simply because the PS2 was the previous market leader by such an unquestionable margin. This was before they (the developers) had any hard data on the platform. But nonetheless production was started. I think this could very well be reflected in the number of games released with the PS3 as the target platform for the 1st couple of years (as that would reflect development time that could not be easily be shifted after the price announcement) despite the 360 having a larger userbase. Going back to the “title availabilityâ€￾ argument, this may have a non-trivial effect on sales, boosting sales in a way that is counter to the high price point. In which case, the question is would this have enough of an impact on hardware sales for the target platform to remain the PS3, thereby perpetuating the cycle? In short, hardware sales being heavily augmented by previous (blind) expectations from developers and publishers. That is all rampant speculation on my part, of course, but something to consider nonetheless, that, at least to me, appears to be within the realm of reason. Just to clarify, I'm not speculating that in the first couple of years there will numerous PS3 exclusives due to the previous developments. I'm speculating that there could a number of titles debuting on the PS3, with a pseudo "timed exclusive" simply because development for the 360 version started later when they realized market penetration would not be as abundant on the PS as it was with the last generation.
 
SPM said:
I think a lot of former teenagers who had a PS2 originally and are now wage earners and have many PS2 games will buy the PS3 because of it's BC, particularly if PS2 games look better due to AA or other enhancements. BC may not be put to use that much in practice, but psychologically I think it is a big factor in choosing a console. There are about 100 million PS3 owners, and that is not a small number.

I also think that XBox360 will lose sales at the low cost end to Wii being cheaper.

I also think that cutting price is not automatically going to translate into sales. XBox1 's sales spiked sharply every time the price was cut, but they dropped again after the spike. The PS2 was more expensive (and arguably lower spec'ed) than XBox1 for most of it's life, but the PS2 consistently sold twice as many. Nintendo GC was also lower spec'ed and Nintendo never bothered to subsidise the GC, but it still sold almost as many as the XBox1.

I havent heard of any enhancments for backwards compatable games other then the given one like it will be at a higher resolution. I havent seen automatic AA. And whats wrong with those teens or former teens PS2s that they seriously need the launch PS3 at $500-$600 a pop because its backward compatable?

And you're also wrong about the PS2 always being more expensive then the Xbox. With the exception of 2004 and 2006 price cuts both consoles had essentially the same price which played a big part in why the PS2 sold more. It was simply seen as having the better more mature library then the Xbox since it just launched, and being the better value since the consoles were matched dollar for dollar. (US Prices). Now its priced considerably higher and the Xbox360 is the console with the better library at the PS3s launch so its a new dilemma for those same people. I strongly believe if the PS3 manages to outsell the Xbox360 at higher prices and with a worse library, thats one hell of a marketing team Sony has. They would have to be to get people to buy an inferior game console for more money. I know some people problably dont want me calling it that, but it is. A console is only as good as its games. The PS3s launch titles cant compare to what the Xbox360 will have at the same time. The PS2 will absolutly remain popular because of this so thats why i dont buy the "we need the $500-$600 dollar box to play our PS1 and PS2 games" theory. They want to play their PS2 games they'll just spend $120 or less for another PS2; should theirs be broken that is.
 
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Skrying said:
No it is not the same principle. There was no premium version. Therefore you had only one choice, so you went with it. So you went with the ONLY version when it got to your budget, this is very different from when you have two versions, many people might hold off even longer till the premium version drops price, or maybe not. There's many different things that can happen when you throw in an entire different version of the same console.

How does this equate to your claim that 'no-one' would be interested in the Core model? I agree 'many people' might buy the Premium, but that's a far cry from what you initially said.

While HDD has certainly increased in value from a consumers standpoint, there are still many people with SDTV and no internet connection for their console, they don't need a HDD, don't need cables, and they will buy the core package. People have been bred for 10 years to buy a console + memory card with no HDD, they aren't suddenly going to NEED a harddrive just because PS3 finally comes with one 5 years after xbox already had it.
 
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scooby_dooby said:
How does this equate to your claim that 'no-one' would be interested in the Core model? I agree 'many people' might buy the Premium, but that's a far cry from what you initially said.

While HDD has certainly increased in value from a consumers standpoint, there are still many people with SDTV and no internet connection for their console, they don't need a HDD, don't need cables, and they will buy the core package. People have been bred for 10 years to buy a console + memory card with no HDD, they aren't suddenly going to NEED a harddrive just because PS3 finally comes with one 5 years after xbox already had it.

People will buy for the future, the core version are dead ends. In previous console generations you had no choice, you bought what you could buy. Now you have a choice and you want to get the most out of the console over its lifetime, so you often buy for the future even if you'll never take advantage of its features.
 
Skrying said:
People will buy for the future, the core version are dead ends.

How is it a dead end if it can be fully upgraded to the same features as the Premium model?

so you often buy for the future even if you'll never take advantage of its features.

Enthusiests may, but not casual customers who just want to play Game 'X' are rarely as concerned.

Wrong comparison. Its $300 Xbox 360 core, or $400 Xbox 360 premimum.

Wrong comparison?

I think your focus is far too enthusiest/early adopter centric. To outline, again:

Who: Casual Gamer who is price conscious (i.e. compulsive buy)
What: Wants to play the new GTA in 2008/2009 -- Both consoles play this game
Options: $199 Xbox or $399 PS3 (hypothetical)

That is a $200 difference. Features are irrelevant because the point is to buy game 'X'.

Your position is that features are what will drive purchases.

I am saying it is not nearly that simple, a history tells us less-powerful consoles FREQUENTLY sell better. Why?

- #1 reason is Software drives sales. Exclusive content, AAA titles, robust and varied libraries, bargin bin titles, etc
- Marketing and Branding.
- Price. Certain consumers cannot justify $300 on a console, let alone $400, $500, and $600. Welcome to the real world where people have budgets.

A number of high priced, feature rich consoles which arrived late met early deaths (3DO anyone?) Now I am on record predicting Sony will lead the generational sales, so no doomsday from me.

But it is far too simplistic to say: Console X has more features, and therefore consumers will pay more for that.

Fans will, of course. But what of the general public? The things driving up the PS3 cost are not current market demands. Take Blu Ray. How many movies are on the market? How many consumers have HDTVs? Harkening back to the time of DVD and how long DVD took to get a lot of consumer interest (and DVD had better IQ on Standard TVs and had a host of advantages of VHS) and it could be years before Blu Ray takes off into the casual mainstream where the majority of sales are done. If it follows the DVD route, it may not be until players are in the $100 range.

I am not downplaying that there are people who buy a console for features (e.g. some consumers bought the Xbox because it had a HDD and Online) but even then only ~24M people bought Xboxs compared to well over 100M who bought PS2s and it is safe to say most of the Xbox purchases, especially later in its life, were for the games as it was very outdated and those features underutilized.

The bottom line is price conscious consumers DO exist.

And for that market they will be looking at the cheapest price they can get a specific experience. If they can get roughly the same experience on a $199 console they can on a $399 console, well, many (not all of course) will go the cheaper route. The Xbox1 features and equal price were not able to overcome the PS brand, larger library, etc... And based on Chefs/Grams posts it seems that the Xbox had a lot of 8.0+ titles.

Sony may, of course, be more aggressive with price cuts. But as I pointed out long ago the Xbox 360 is clearly designed with price reduction in view. The HDD went underutilized last gen, so they made it optional with a switch of focus from "throw the kitchen sink in" to offer options while having a base that reduces in price to tap the market that wont spend $400 on a console. And that market exists...

I know, because you are talking to a gamer who wont pay $400 for a new console ;)
 
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