What is the impact of no PS3 price drop?

[vanquish]

Price cut or no price cut, does anyone actually believe the PS3 won't end up beating the 360?

If you look at the slowly closing gap in sales units, it seems almost inevitable that the PS3 will overtake the 360 in the next couple of years.

Especially when buyers notice a difference in the quality of the games with PS3 exclusives like Killzone 2, GT5, Heavy Rain etc, which MS has no real answer for due to their focus on 3rd party exclusives. With PS3 development issues being largely overcome these days, the advantages 360 MP titles held over their PS3 counterparts will be eroded (take TR:UW for example).

The increasing uptake of Blu-ray will also add momentum to sales.

You just have to look at how well the PS3 is doing in Europe and especially in tech savvy markets like Australia, where some retailer catalogues do not even list 360 consoles and games, only the Wii, PS3 and handhelds. The USA is seemingly the last bastion of the 360.

With the recent closures of Ensemble and ACES it is increasingly apparent that MS is focused of short term success rather than long term viability.

 

[Rangers]

Price cut or no price cut, does anyone actually believe the PS3 won't end up beating the 360?

If you look at the slowly closing gap in sales units, it seems almost inevitable that the PS3 will overtake the 360 in the next couple of years.

Especially when buyers notice a difference in the quality of the games with PS3 exclusives like Killzone 2, GT5, Heavy Rain etc, which MS has no real answer for due to their focus on 3rd party exclusives. With PS3 development issues being largely overcome these days, the advantages 360 MP titles held over their PS3 counterparts will be eroded (take TR:UW for example).

The increasing uptake of Blu-ray will also add momentum to sales.

You just have to look at how well the PS3 is doing in Europe and especially in tech savvy markets like Australia, where some retailer catalogues do not even list 360 consoles and games, only the Wii, PS3 and handhelds. The USA is seemingly the last bastion of the 360.

With the recent closures of Ensemble and ACES it is increasingly apparent the MS is focused of short term success rather than long term viability.

Sure, well, I'll say this, going into this gen it seemed pretty impossible for 360 to end up ahead of PS3. Simply because of Japan. But now Japan as a market, and especially a HD console market, has shrunk so much it means little anymore.

So being Japan sort of "disappeared", it now does indeed appear 360 has a opportunity to finish ahead of PS3 when the gen is concluded. I'd say it's something like 50-50, or maybe 60-40 odds.

The rest of your post seems to take a very PS3 favoritist view of things..360 is doing much better in Europe now than ever, and in USA seems to be doubling PS3. These are unprecedented results for any playstation to say the least.

I dont think the closure of Ensemble and Aces means anything. They werent a fit for consoles. There are plenty of internal studios hard at work in MS. Including (at least) two apparently on proper Halo games.

You listed a bunch of titles next, but I'm sorry I heard the same thing last spring, how could MS withstand the onslaught of titles such as MGS4, GT5P, when there seemingly wasnt much in the works for 360? Well they came through 08 surviving and prospering. A lot of online hype hasnt translated to PS3 sales yet.

I am not sure how great the PS3 is supposedly doing in Australia either..among the many questionable points in your post..I'd imagine it's been outsold LTD and probably being outsold right now.

All this 360 momentum is based on the price cut..and thats why this thread exists.

 

[Cheezdoodles]

Price cut or no price cut, does anyone actually believe the PS3 won't end up beating the 360?
.

I dunno, i dont believe the PS3 sales are higher than the 360 anymore.

Atleast not if we are to believe the reports from MS that have been posted after the price cuts.

 

[vanquish]

Sure, well, I'll say this, going into this gen it seemed pretty impossible for 360 to end up ahead of PS3. Simply because of Japan. But now Japan as a market, and especially a HD console market, has shrunk so much it means little anymore.

So being Japan sort of "disappeared", it now does indeed appear 360 has a opportunity to finish ahead of PS3 when the gen is concluded. I'd say it's something like 50-50, or maybe 60-40 odds.

The rest of your post seems to take a very PS3 favoritist view of things..360 is doing much better in Europe now than ever, and in USA seems to be doubling PS3. These are unprecedented results for any playstation to say the least.

I dont think the closure of Ensemble and Aces means anything. They werent a fit for consoles. There are plenty of internal studios hard at work in MS. Including (at least) two apparently on proper Halo games.

You listed a bunch of titles next, but I'm sorry I heard the same thing last spring, how could MS withstand the onslaught of titles such as MGS4, GT5P, when there seemingly wasnt much in the works for 360? Well they came through 08 surviving and prospering. A lot of online hype hasnt translated to PS3 sales yet.

I am not sure how great the PS3 is supposedly doing in Australia either..among the many questionable points in your post..I'd imagine it's been outsold LTD and probably being outsold right now.

All this 360 momentum is based on the price cut..and thats why this thread exists.

Firstly I am hardly a PS3 favouritist.

Japan is still a major market, although it has shrunk. And Sony has cast doubts on MS claim that the 360 is ahead by a million units in Europe. And this lead is simply due to the large 360 price cut, not because customers are particularly enamored with the hardware.

And even if it is a million, it is only a million. And it just shows you how fast the PS3 has been gaining ground outside the States, despite by substantially more expensive and coming out later. It has reached 20 million units faster than the 360 did as well. http://news.vgchartz.com/news.php?id=2954 So what you have here, is a substantially more expensive console gaining ground quite rapidly.

I live in Australia, and I can tell you, it is very much a Sony bastion. Electronics retailers here regularly promote the PS3 as the Full HD experience, which you should get with your HDTV etc. And a recent catalogue by a large national retailer (like Walmart) did not feature any 360 merchandise at all.

The only thing MS has a clear lead on is attach rate.

Even some of my friends who are diehard 360 fans with launch consoles, are thinking of switching camps due to exclusives like Killzone 2, Uncharted 2 etc.
The 360 simply doesn't have the same buzz anymore (after H3 and GoW1/2), and the lack of 1st party devs, after the losses of the 3 B's in 2007, and the recent closures, makes it hard to see where any will come from.

 

[Rangers]

Well if you have some hard sales figures about Australia, bring them on. Otherwise it's just so much conjecture. I also hear anecdotes occasionally that the 360 is "totally dead" and the like in Europe, yet overall it is keeping pace with PS3 there.

The last quarter PS3 lost ground of 1.5 million units by shipping totals. To be losing any units right now and hope to catch up is disastrous. There is also trends. One year ago PS3 was outselling 360. Today it is the reverse.

Anyways do you read articles like this?? It isnt just me saying it, it's Sony saying it.

I agree with you Sony seems to be capturing a lot of (message board?) mindshare with Killlzone 2..but I saw the same thing last year with MGS4. Until it translates to hard sales we must be skeptical.

 

[Carl B]

One year ago PS3 was outselling 360. Today it is the reverse.

But the year before that it was the reverse of the former.

I don't think there are any definites or fixed patters one can point to; the trends change based on the variables at the time.

 

[Tap In]

But the year before that it was the reverse of the former.

I don't think there are any definites or fixed patters one can point to; the trends change based on the variables at the time.

True, but I believe Rangers was just correcting the incorrect statement made that "PS3 is currently outselling 360".

 

[dobwal]

Firstly I am hardly a PS3 favouritist.

Japan is still a major market, although it has shrunk. And Sony has cast doubts on MS claim that the 360 is ahead by a million units in Europe. And this lead is simply due to the large 360 price cut, not because customers are particularly enamored with the hardware.

And even if it is a million, it is only a million. And it just shows you how fast the PS3 has been gaining ground outside the States, despite by substantially more expensive and coming out later. It has reached 20 million units faster than the 360 did as well. http://news.vgchartz.com/news.php?id=2954 So what you have here, is a substantially more expensive console gaining ground quite rapidly.

I live in Australia, and I can tell you, it is very much a Sony bastion. Electronics retailers here regularly promote the PS3 as the Full HD experience, which you should get with your HDTV etc. And a recent catalogue by a large national retailer (like Walmart) did not feature any 360 merchandise at all.

The only thing MS has a clear lead on is attach rate.

Even some of my friends who are diehard 360 fans with launch consoles, are thinking of switching camps due to exclusives like Killzone 2, Uncharted 2 etc.
The 360 simply doesn't have the same buzz anymore (after H3 and GoW1/2), and the lack of 1st party devs, after the losses of the 3 B's in 2007, and the recent closures, makes it hard to see where any will come from.

Hardly anything you said is reflected in hard data. Japan is still a major market for gaming but the PS3 and the 360 are relatively minor players in the market. You're talking 2-3 million PS3s versus 800K 360s. No where near the gap that existed last generation and no where near the gap anyone expected from this generation.

"How fast the PS3 has been gaining ground outside the States"? What are you talking about? In Jan 08 Reeves said that the PS3 would overtake the 360 in the PAL markets during the summer of 08 and even stated in May 08 that the PS3 had actually outsold the 360 in Europe. Yet, has the PS3 overtaking the 360 in the overall PAL market? No. And Reeves has gone from in May 08 "there are more PS3 than 360 in Europe" to Jan 09 "we are neck and neck". Just a year ago, we were here discussing what MS could do better to compete in Europe. Now we sit here today wondering if MS has a one million lead in Europe, a lead that had supposely evaporated 8-9 months ago.

The N64 released a year later than the PS1 and took only about a year to cut the PS1 lead to roughly 1-2 million. However, the N64 sales slowed and ran neck and neck, in terms of sales rate, with the PS1 for a few months until the PS1 pulled away and grew to 100 million+ consoles. Does that mean the 360 will do the same? No. But its shows that the fastest to whatever number means absolutely nothing if one has a headstart and can reverse the earlier sales rate of one's competitor, which is exactly what the 360 has done.

The 360 has lost its buzz? Didn't people say the same thing last year but with titles such as Resistance 2, LBP and FF lumped in there with KZ2 and GT5? How many times do we have to hear this assertion? What, until it finally happens?

Is the PS3 destined for the third spot. Absolutely not!!! But the PS3's reversal of fortune will largely depend on the PS3's ability to cut its price and how MS competes with its own price cuts and not one or two exclusive titles. Right now, we have no ideal how much ammunition Sony or MS have in their guns.

 

[Zassk]

Japan is really not a significant console market anymore. It is a handheld market. If you look at Media Create numbers, all 3 consoles add up to less than 50k in Japan on some weeks now.

Basically there are two markets left: the US and the rest-of-world (dominated by the EU). Since we get NPD numbers for the US, and worldwide numbers from the manufacturers themselves, we can infer the numbers for the rest-of-world market. We can tell with some confidence whether the PS3 is thriving in either market, and the answer is no. The PS3 sales rate has contracted year-over-year in both markets, while the 360 sales rate grew consistently in both markets when it was at the same price point.

The 360 clearly switched to a new rate of sales in both markets in 2008. While the PS3 may have reached 20m more quickly, it remains to be seen whether it can make a transition to the 360's new sales rate. In order to reach 2nd place, it needs to beat the 360's new sales rate. In the meantime, it is losing ground at a faster rate than it previously gained. The gap is not shrinking, it's larger than ever and growing.

A price cut would help the PS3, but by how much? The 360's price cut at the same price point in 2007 gave only temporary boosts to sales, and IMO we should expect the same for the PS3's next price cut, unless it's a much greater one. Only the magic $199 price point that was hit later pushed the 360 to a permanent new sales rate.

Blu-Ray probably helped the PS3 in the past, but I feel it has fading significance, since standalone units will be at least $100 cheaper than the PS3 for the remainder of its life.

IMO, the way to move the PS3 into 2nd place is to introduce a budget SKU that can be sold for $100 less than the existing 40 GB SKU. Sell it for the same price as Sony's BDP-S350 Blu-Ray player, which presumably is profitable. I would guess: no HDD, few GB of embedded storage, 4 Bluetooth, 2 USB, no wifi, no BC. This would sell like gangbusters at holiday time. I can't see the PS3 ever making up the lost ground to the 360 with the current 40 GB unit as their highest volume SKU.

 

[Asher]

There's no way the PS3 could ship without an HDD -- games rely on it.

 

[Zassk]

It needs a nominal amount of storage, not a HDD specifically. What's the biggest install currently for games like MGS or DMC - 5 GB? 6 GB? Give it enough space for 1 game install at a time. Certifying these games that have huge required installs was a bad mistake, but going forward, Sony could mandate that installs be optional like KZ2.

 

[Brad Grenz]

"How fast the PS3 has been gaining ground outside the States"? What are you talking about? In Jan 08 Reeves said that the PS3 would overtake the 360 in the PAL markets during the summer of 08 and even stated in May 08 that the PS3 had actually outsold the 360 in Europe. Yet, has the PS3 overtaking the 360 in the overall PAL market? No. And Reeves has gone from in May 08 "there are more PS3 than 360 in Europe" to Jan 09 "we are neck and neck". Just a year ago, we were here discussing what MS could do better to compete in Europe. Now we sit here today wondering if MS has a one million lead in Europe, a lead that had supposely evaporated 8-9 months ago.

Well, the 360 had a price cut in there that reversed the trend and all it would take is a price cut from Sony to flop things back, strongly, in the PS3's favor. You're talking about it as if Sony was telling tales when it never really had momentum. You have to remember that MS's claim about a million console advantage was not for all of Europe, but a specific set of the largest countries and where almost all of the advantage was in the UK.

 

[vanquish]

While the 360 might be outselling the PS3, this mostly down to the ridiculously low prices for the system (sales were declining before the price drop). PS3 sales however aren't driven by price, but rather the decisions of tech savvy (or who think they are) consumers.
Which means the 360 might experience sales growth in the short term, the PS3 is more likely to experience long term sales success.

 

[mrcorbo]

While the 360 might be outselling the PS3, this mostly down to the ridiculously low prices for the system (sales were declining before the price drop). PS3 sales however aren't driven by price, but rather the decisions of tech savvy (or who think they are) consumers.
Which means the 360 might experience sales growth in the short term, the PS3 is more likely to experience long term sales success.

I don't agree with that. It has nothing to do with tech-savvy-ness. It's simply a question of perceived value. Sony have managed to convince a fair amount of people that their system is worth paying a certain premium for. The problem is that when competitors are able to create a large enough price delta, and that premium increases, that perception can change. Since a price drop is looking unlikely, how is Sony going to convince consumers to pay an even larger premium for the PS3? Especially in consideration of the current economic climate.

 

[Rangers]

While the 360 might be outselling the PS3, this mostly down to the ridiculously low prices for the system (sales were declining before the price drop). PS3 sales however aren't driven by price, but rather the decisions of tech savvy (or who think they are) consumers.
Which means the 360 might experience sales growth in the short term, the PS3 is more likely to experience long term sales success.

I would take issue with saying the 360 price is "ridiculously low", there are 3 sku's, a 199/299/399. Everybody tends to focus on the 199 and go "Oh the 360 is 199" but that isn't the case. I still think historically speaking the 360 price is still fairly high (though inflation factors in as well, though some will argue consumer electronics only ever suffer from deflation ). According to Vgchartz rather suspect data around fall season, the sales were about half Arcade and half the higher priced sku's. Remember Xbox 1 was reduced to 199 for the only SKU in early 2002, 5 months after it launched. 360 just got there 3 years after launch with it's lowest SKU.

Significantly lower than PS3, yeah, fire sale low, I dont think so.

Also I found a Australia weekly software chart which doesnt suggest as much PS3 domination down there as you suggest. In fairness, it could have been just a random week where PS3 didn't show up. But of the top 10, there are 5 Wii games, 2 DS, 2 360, and 1 PS2.

 

[one]

The 360 clearly switched to a new rate of sales in both markets in 2008. While the PS3 may have reached 20m more quickly, it remains to be seen whether it can make a transition to the 360's new sales rate. In order to reach 2nd place, it needs to beat the 360's new sales rate. In the meantime, it is losing ground at a faster rate than it previously gained. The gap is not shrinking, it's larger than ever and growing.

A price cut would help the PS3, but by how much? The 360's price cut at the same price point in 2007 gave only temporary boosts to sales, and IMO we should expect the same for the PS3's next price cut, unless it's a much greater one. Only the magic $199 price point that was hit later pushed the 360 to a permanent new sales rate.

I'm not sure if Microsoft is as enthusiastic about this result as you are. Is this enough for Microsoft's expectation at this point of console life cycle? At least it exposed one thing which was shrouded before, 360 became cheaper than Wii but people still want Wii.

http://www.gamasutra.com/view/feature/3906/npd_behind_the_numbers_december_.php

The third platform holder, Microsoft, saw sales of its Xbox 360 console jump over 14% year-on-year for the month of December, from 1.26 million systems to 1.44 million systems.

However the Xbox 360 was only up from 4.6 million units during calendar year 2007 to 4.7 million during 2008. Without the dramatic increase in sales after Microsoft's August 2008 price drops, the system might well have recorded lower sales in 2008 than in 2007.

 

[vanquish]

I don't agree with that. It has nothing to do with tech-savvy-ness. It's simply a question of perceived value. Sony have managed to convince a fair amount of people that their system is worth paying a certain premium for. The problem is that when competitors are able to create a large enough price delta, and that premium increases, that perception can change. Since a price drop is looking unlikely, how is Sony going to convince consumers to pay an even larger premium for the PS3? Especially in consideration of the current economic climate.

That's why I included the part in brackets, the more technically inclined buyer (which is basically anyone who isn't a casual gamer) believes (in many cases quite strongly) that the PS3 is a hands down superior package.

Sony are very good at marketing (aka blatant lying) and many people believe this spin and simply refuse to believe otherwise.

For example in Australia in 2008 the consoles standings were:
Xbox 360 - 237,000
PlayStation 3 - 213,000
Which is not a lot, taking into account the price difference (which is larger than the difference in the States)
It shows PS3 sales are growing, despite the high price point.
360 sales largely remained stagnant before the significant price drop gave it a much needed shot of adrenalin.

Non Wii consumers would but the PS3 regardless of price it would seem, while 360 sales seem very much price dependent, especially in territories outside the US where it doesn't enjoy a home field advantage.

 

[Shifty Geezer]

And you attribute PS3's success entirely to Sony's lies (what are their recent lies that are convincing consumers to buy PS3 BTW? Or is everyone buying PS3 now because of the E3 '05 trailers?) and not that they are offering exclusive games and features people want?

 

[vanquish]

And you attribute PS3's success entirely to Sony's lies (what are their recent lies that are convincing consumers to buy PS3 BTW? Or is everyone buying PS3 now because of the E3 '05 trailers?) and not that they are offering exclusive games and features people want?

It was an exaggeration, but they are very good at manipulating the truth and can be quite underhanded in their marketing at times, eg. the Full HD nonsense, the recent value comparisons between both consoles etc.

The rest of what you said is valid though.

 

[Shifty Geezer]

It was an exaggeration, but they are very good at manipulating the truth and can be quite underhanded in their marketing at times, eg. the Full HD nonsense, the recent value comparisons between both consoles etc.

Much like most other businesses...which isn't a topic of discussion