X360 price drop speculation

In the 'premium' console space (read:not Wii), the money is made on the software and now also media downloads. In that context i think shareholders would probably prefer marketshare and residual sales revenue over a smaller number of 'one time' payouts during the hardware purchse. Not saying that I agree with scoobs numbers entirely, but i do respectfully differ with the concept youre presenting here.

 

It's possible. But people have shown they care far more about which console is cheapest and has the best game library, not which one has better textures, AA or lighting.

See PS1 vs N64, PS2 vs Xbox, Wii vs PS3 for example.

 

For the record, I'm certainly NOT saying that MS will do this.

I'm just saying they should, it would be smart in the longterm IMHO.

If I had to guess what they will do, I think they'll largely squander the opportunity, and pinch pennies like they have so far...

 

Halo 3 Premium Pack = $399
Halo 3 Core Pack = $299

 

I would agree that they need to drop a SKU, but with Sony now having 2 SKUs again, there's little incentive for Microsoft to get rid of one of them. With that said your pricing is like my thinking, conservative small drops for now and larger ones in the Spring. I could see them going $275 for Core, $350 for Premium and $425 for Elite. I don't think adding a HD to the Core package is something Microsoft will do, but I could see them using the same HDMI-enabled motherboard on all SKUs. Keeps them from having to stock separate motherboard and components.

Anyway, Pachter's $50 drop on Core and Premium and $80 on the Elite seems likely, but we'll have to see. What will be even more interesting is how they adjust the hard drive and memory card prices. They can't do one without doing the other.

Tommy McClain

 

IMO, some great marketing could come from putting the Elite at $360.
Then:
Premium $300
Core $229 w/ memory card (or maybe $199 without)

All three upgraded with HANA, but only the elite shipping with HDMI cable.

This would put a lot of pressure on Sony, and a little pressure on Nintendo.


Or, if MS really wanted to pressure Nintendo, IMO they just need to price the Core at $199 with memory card and one game included, e.g. Kameo or Viva Pinata.

 

MS bragging about holiday sales is like the San Antonio Spurs bragging about winning the NBA finals.

The purpose is to put as many consoles in people homes as possible not maximize profits on each console sold.

 

Ok, then just sell the Elite at $100 and get it over with. They can outright win the war, right?

 

Get over yourself.

There is nothign far fetched about dropping price 33%, it happend with Xbox1, it happened with PS2, it happened with PS1.

Equating that to pricing the Elite at $100(a 75% pricecut) is pathetic.

Are you capable of having a grown up debate, or do you always have to resort to these silly strawmen argument when someone disagress with your outlook?

 

What is it you think you're adding to the discussion here? Try and think before you post nonsense like this here. God, E3 hasn't started yet and people are already leaving their brains in jars on the shelf.

I don't think MS will watch the pricedrop, and I'll be very disappointed. How can they think there's much more market out there for the 360 at its current price point?

 

My point was this is a business, they are trying to make money, not put consoles in homes. MS lost like $5B on the Xbox, they cannot afford to repeat that, their share holders won't let them flush money down the drain just so they can brag about sales.

 

You show a total lack of understanding about how the console market works.

It's a razor blade business model, they don't make the money on the consoles they make it on the software and peripherals. To 'make money' you must sell consoles, securing more software, which in turn makes more money.

What I find amusing, is you've suggested they offer a core with HDD at $279. I suggest they do a core at $199 and sell the HDD seperately at $50 or $60. So, we're talking a difference of $30. It my case however, I leave the lowest cost option open to consumers which is $199 + memory card ($220).

Yet your approach is hunky dory, while mine is "flushing money down the toilet??", like I said, get over yourself. Your POV is not the only one worth hearing.

Just relax, and debate people's points rather than put words in their mouths and ruin the discussion.

 

"lost like $5B" huh?

Not to attack you, but where did you get this from?


EDIT: was to add in what appears to be opinion ("lost like"). In that case forget my question.

 

No offense taken, I don't think there are any hard numbers, MS doesn't release the break downs. It's hard to find summaries on the loss, but I found this.

http://seattlepi.nwsource.com/business/223911_xboxbusiness12.html

I think if you factor in the R&D cost pre-2001, you can see how $4B-$5B is might be realistic.

 

Why are you feigning ignorance? You've been here long enough for me to know you understand the traditional profit models as well as the cost models of the console market.

We all know that the profit potential of a console itself pales to the amount of potential profit that can be yielded by the software and peripherals that are purchased for that console.

Thats why for the manufacturers not named Nintendo the question at the dawn of a console generation is "How much money can we afford to lose per console?" and not "How can we maximize the profit per console?".

 

Use some common sense. The point of this exercise is not to make money. The point is to prevent a Sony monopoly on home entertainment.

I have no doubt that the MS shareholders would consider $1B/year to be a worthwhile investment to hold Sony (and others) at bay.

Maximizing console unit sales will accomplish for MS what WebTV failed to do: it will give computer software a foothold in the living room.

MS can and will afford it.

 

I agree that they've really sold as many consoles at their current price point as they are going to. A 250, 350 and 400 price line up would be great. The core is a super steal at 250 if it is still packaged with Kameo and PGR like it is many places now. At least in Canada.

Their bragging point now is games, but if they give the PS3 this break to close the gap in sales for any length of time then it's going to be a lot harder for them to keep the 3rd parties jumping the Sony ship onto the MS one (or at least going multi platform rather than staying Sony loyal) the way they've been doing lately.

We all now they would have liked to drag this out till Halo landed, but it's time to react.

 

And depending on how much of a cost difference between the 20GB harddrive and slightly bigger ones like 40 to 80 GB, I would say up the harddrive capacity on the premium 360. That will make their movie/tv download service at least usable, and still allow some value for the Elite. With my 20gb x360, it's barely enough for demos and Live arcade, I haven't even bother looking at their Live marketplace video download section.

 

Here in the states there are no pack-in titles included with any SKU. If there are, then it's only done through a specific retailer. I don't expect Microsoft to include any pack-ins in the official SKUs until at least next year. I also don't expect them to include any memory card or hard drives in the Core pack. It's called the Core for a reason. Anyway, I think a $250 Core itself will sell very well. Especially when they drop the prices on the memory cards and hard drives. Maybe something like this?

64mb $40 -> $25(already $25 on Amazon)
256mb $50 -> $35(already $43 on Amazon)
20gb $100 -> $75(already $90 on Amazon)
120gb $180 -> $150

BTW, I find it odd that on Microsoft's site under Accessories the 20gb drive doesn't have an official list price(just says Pre-Order) and it's release date is listed as TBD. LOL Maybe they're about discontinue it? Probably wouldn't be a bad idea to get rid of the 64mb memory card and 20gb hard drive.

Tommy McClain

 

Where I live I've already seen the 360 Core priced at $269.99 fairly regularily vs the Wii at $289.99 which is actually a $10 increase compared to right at launch.