What can Sony do about Japan?

[Deusp]

okay let's say I concede 30 million... 70+ million at $199 and below. so how can you say $199 price point is not a watermark price for mass market saturation?

anyone with any sense or a calculator can see that the Core will be the first SKU, not made by Nintendo, that is poised to hit $199 and adding a memory card to it is just what 100+ million PS2 owners did. I don't think they'll bat an eye.

Core sales are what right now, about 1 million? Maybe even 2 million? Assuming a similar jump, you're looking at around 2.5 - 5 million units at $199 and less. That's not a whole lot. My point is that relative to the sales you get $300 price point, sales do not tend to skyrocket at $200 or less from a historic standpoint.

 

[Tap In]

Core sales are what right now, about 1 million? Maybe even 2 million? Assuming a similar jump, you're looking at around 2.5 - 5 million units at $199 and less. That's not a whole lot. My point is that relative to the sales you get $300 price point, sales do not tend to skyrocket at $200 or less from a historic standpoint.

Well I disagree.

First of all current Core sales to date are not an issue AT ALL because it's the first time a strategy like this has been used. The Premium is hitting the early adopter right now in the sweet spot. The Core is designed for an entire future market that has not even been scratched (except by Wii) that won't even THINK about a new machine at $299 or higher.

they wait until the old generation is on its last legs and then they look to upgrade when the new gen is 2-3 years in and the price drops to $199 (impulse buy range).

when the Core hits impulse buy range, it will be as if an entirely new Sku were launched (market-wise).

 

[TheChefO]

About 30 million or so I believe. Then something like 40 million at $179-199, and another 40 million happened at $129-149.

YR	WW	MSRP	TOTAL SOLD
2000	6.4	$300 	6.4
2001	18.5	$300 	24.9
2002	24.4	$200 	49.3
2003	19.87	$180 	69.17
2004	11.93	$150 	81.1
2005	19.98	$130 	101.08

Note the peak of the platform was 24.4million ps2's sold the year it hit $200.

 

[Tap In]

thanks Chef... so around 25 million at $299 and all others after the $199

 

[TheChefO]

thanks Chef... so around 25 million at $299 and all others after the $199

yep

Pretty significant boost in my book going from 18.5 to 24.4 the following year.

This also paints a clear picture:

_____Date____________ps2__________xbox___________gc____________gba
        Jan-02       357,971    127,034        58,712       170,550
        Feb-02       414,500    138,527        76,815       408,431
        Mar-02       359,163    135,402      110,251       498,948
        Apr-02       195,707     77,457        81,195        304,917
        May-02       463,709    228,914      111,063       314,146                                      
        Jun-02       690,021    263,338       206,900       546,708

Anyone care to guess where the pricedrop happened?

 

[Deusp]

Well I disagree.

First of all current Core sales to date are not an issue AT ALL because it's the first time a strategy like this has been used. The Premium is hitting the early adopter right now in the sweet spot. The Core is designed for an entire future market that has not even been scratched (except by Wii) that won't even THINK about a new machine at $299 or higher.

they wait until the old generation is on its last legs and then they look to upgrade when the new gen is 2-3 years in and the price drops to $199 (impulse buy range).

when the Core hits impulse buy range, it will be as if an entirely new Sku were launched (market-wise).

Oh yes, the $150 price point of the DC and the $200 of the GC did wonders against the $300 PS2. Oh wait, they didn't. The claim that there's a huge impulse buying group at the $199 pricepoint is completely absurd. If you are willing to jump at a $199 console, you are only somewhat less willing to jump at the $299 price point, which is just 2 extra games. If your claim was the Core will jump by 50 or 100 percent with a 33% price cut, I will fully believe you. However, you are claiming that sales will jump by close to an order of magnitude, which I would not believe. That's completely unprecedented in video game history, and in just about any industry ever. I'm not aware of any product where a 33-50% could produce such an enormous sales increase, nor can I reasonably imagine such a product either.

 

[Crossbar]

YR	WW	MSRP	TOTAL SOLD
2000	6.4	$300 	6.4
2001	18.5	$300 	24.9
2002	24.4	$200 	49.3
2003	19.87	$180 	69.17
2004	11.93	$150 	81.1
2005	19.98	$130 	101.08

Note the peak of the platform was 24.4million ps2's sold the year it hit $200.

What is your prediction of the price difference between the Core and the Premium at the time when the Core hits $200?

And what is your prediction of the price difference between the Premium and the low end PS3?

 

[TheChefO]

Oh yes, the $150 price point of the DC and the $200 of the GC did wonders against the $300 PS2. Oh wait, they didn't. The claim that there's a huge impulse buying group at the $199 pricepoint is completely absurd. If you are willing to jump at a $199 console, you are only somewhat less willing to jump at the $299 price point, which is just 2 extra games. If your claim was the Core will jump by 50 or 100 percent with a 33% price cut, I will fully believe you. However, you are claiming that sales will jump by close to an order of magnitude, which I not believe. That's completely unprecedented in video game history, and in just about any industry ever. I'm not aware of any product where a 50% could produce such an enormous sales increase, nor can I reasonably imagine such a product either.

ps2 went from 200k the month prior to price drop to 700k after the full effect of the price drop went into effect.

Pretty significant.

 

[Deusp]

ps2 went from 200k the month prior to price drop to 700k after the full effect of the price drop went into effect.

Pretty significant.

Why don't you look at December sales of those respective years. A surge in sales is fully expected immediately after a price cut, but long term it was not as significant.

 

[Tap In]

Oh yes, the $150 price point of the DC and the $200 of the GC did wonders against the $300 PS2. Oh wait, they didn't. The claim that there's a huge impulse buying group at the $199 pricepoint is completely absurd. If you are willing to jump at a $199 console, you are only somewhat less willing to jump at the $299 price point, which is just 2 extra games. If your claim was the Core will jump by 50 or 100 percent with a 33% price cut, I will fully believe you. However, you are claiming that sales will jump by close to an order of magnitude, which I not believe. That's completely unprecedented in video game history, and in just about any industry ever. I'm not aware of any product where a 50% could produce such an enormous sales increase, nor can I reasonably imagine such a product either.

First of all don't even add DC or GC to your argument. PS2 owned it in dev support and games library; something that the 360 has NOTHING to be concerned about. this time, they have the library, the Platinum hits and full dev support.

2nd point is... I'm not claiming that they will sell 70 million Cores just that it will reveal itself as a valid sku in the future. to all of those claiming that it is a mistake I am saying they evidently do not have the foresight to see it for what it is; an entry level machine for millions of future laggards. How many million? who knows, but potentially a reasonable market share IMO.

 

[TheChefO]

What is your prediction of the price difference between the Core and the Premium at the time when the Core hits $200?

And what is your prediction of the price difference between the Premium and the low end PS3?

I have no insider info, but one could assume ms would keep the $100 seperation via incentives for the premium.

I have no idea how Sony would react. One one hand, logic says Sony would drop the ps3 price by the same amount ($100) on the other hand they have internal pressures to achieve profitable hardware asap. Who knows.

 

[TheChefO]

Why don't you look at December sales of those respective years. A surge in sales is fully expected immediately after a price cut, but long term it was not as significant.

From 2m to 2.7m ($300 to $200)

 

[NERO]

yep

Pretty significant boost in my book going from 18.5 to 24.4 the following year.

Good pull of effective numbers.
Note that price is always primary but don't forget that the building that occured in the first 2 years of the PS2's existance, the killer apps released, the advertising say alot about the increase. The first two years worked at branding the PS2 as hip at any price. It is amazing that the PS2 population nearly doubled in the first price cut year.
----
Back to the thread. Does the PS2 population explosion have any relevance to the PS3 in Japan? Not much IMO. There is a mythical entry-level MSRP for game consoles that has existed for nearly 20 years an it has been @~2-300USD. The PS3 has doubled this magic number. Also note that in Sony's grand strategy the PS3 is crucial in being the BR trojan but does not have to (and definitely will not) perform as did its predecessor.

MOMENTUM!! That's the word I was looking for in the first pargraph.

 

[Deusp]

First of all don't even add DC or GC to your argument. PS2 owned it in dev support and games library; something that the 360 has NOTHING to be concerned about. this time, they have the library, the Platinum hits and full dev support.

But that's exact what you are claiming! The Core has a worse gaming experience than the Premium, and you're saying that its lower cost will make a world of different. That's the real nonsense.

2nd point is... I'm not claiming that they will sell 70 million Cores just that it will reveal itself as a valid sku in the future. to all of those claiming that it is a mistake I am saying they evidently do not have the foresight to see it for what it is; an entry level machine for millions of future laggards. How many million? who knows, but potentially a reasonable market share IMO.

If by valid you meaning going from 1 million to 2.5 - 5 million, I will believe you. That's consistent with the effects of price cuts on previous consoles. You seem to be claiming that it will do significantly more than that. Not 70 million, but still many millions of units. That is not likely to happen.

 

[Deusp]

From 2m to 2.7m ($300 to $200)

Thanks. As you can see, sales improve, but not enormously.

 

[TheChefO]

Thanks. As you can see, sales improve, but not enormously.

1.35x is nothing to sneeze at. Also sales directly afterward the pricecut were a huge contrast of 3.5x.

 

[Tap In]

The Core has a worse gaming experience than the Premium, and you're saying that its lower cost will make a world of different.

Again... please stop and think before you post.

They play ALL of the exact same games and the Core can be slowly brought up to have the EXACT same features of the Premium over time with add ons. Something that, believe it or not, a LOT of people prefer to do even if it means spending more in the long run. first they buy the entry level sku, then they get some peripherals for gifts or add one later when they get a big paycheck or trade in some games or whatnot.

ok I'm done here it's obviously pointless continuing this with you.

 

[Deusp]

1.35x is nothing to sneeze at. Also sales directly afterward the pricecut were a huge contrast of 3.5x.

It is if your starting point is only 1 or 2 million.

 

[Deusp]

Again... please stop and think before you post.

They play ALL of the exact same games and the Core can be slowly brought up to have the EXACT same features of the Premium over time with add ons. Something that, believe it or not, a LOT of people prefer to do even if it means spending more in the long run. first they buy the entry level sku, then they get some peripherals for gifts or add one later when they get a big paycheck or trade in some games or whatnot.

ok I'm done here it's obviously pointless continuing this with you.

Let me break it you like this: 360 Core is selling worse that either the DC or GC at this point in its life. Which means it's so far it's a complete flop, not much different than the DC or GC. Price cuts didn't save the latter, so it's totally reasonable to suggest that price cuts will not save the Core either.

 

[scooby_dooby]

PS2 dropped to $199 the following year, in Spring of 2002. It was $300 throughout 2001.

So, ignoring the typo, the point stands. Biggest holiday in gaming, 24million units sold, all at $199. The facts do not support your opinion at all.

I can't imagine the industry being so stratified that for the equivalent of 3 extra games, your sales is going to increase by hundreds of percentage points.

I can't imagine where on earth you pull 'hundreds of percentage points' from. Not only do you completely fail to address any of my points, you bring something up that was not even in the discussion. Great fun debating with you