X360 price drop speculation

[Dave Baumann]

I don't think it predicated by 65nm at all. As I said in another thread, I don't necessarily see that there will be a change in unit configurations when the 65nm parts come on-stream as its easier to transition between the two.

Personally I think the gating factor at the moment is units currently in the channel.

 

[Shifty Geezer]

If 65nm is just some months away though, won't MS be best served by keeping the price up until it's available, clear the existing pricier stock, and then lose less on the 65nm chipsets?

 

[Dave Baumann]

It entirely depends on what their thought processes are with regards to their concept of "best served"; its the same old same old with regards to pricing and market adoption etc.

Besides, you can always price earlier, factoring in the differences that you know will come onstream soon.

 

[<nu>faust]

ahem i'm sorry i thought bloomberg updated its earlier story with the confirmation of the price drop(just today) and it looks like it's just a regular update stating that ms has to and eventually will drop the price. false alarm, my apologies

 

[one]

http://www.bloomberg.com/apps/news?pid=20601080&sid=afgq3TkNyH_g&refer=asia

Sony Cuts PlayStation 3 Price, Aims to Double Sales (Update4)

By Michael White

July 9 (Bloomberg)

...

Clearing up the trouble made PlayStation 3 profitable several months ago, giving the company room to cut prices, analyst Doherty said. Microsoft still loses money on each Xbox 360 it sells, he said.

``Any price cut they try to make puts them more into the red,'' Doherty said.

 

[TheChefO]

In the EG interview with Peter Moore, they asked him about the ps3 pricedrop and he turned it around as a value-add with the same price points. Which is true. Makes me think MS may try to follow the same path and simply upgrade the same sku's.

Perhaps:
add a memcard and game (pgr3, kameo) to the core w/hdmi

replace the hdd in the premium with a 60gb and a game (pgr3, kameo) w/hdmi

add the text pad and camera to the elite with a game (Forza2)


Personally I think this is the wrong path to take as it lessons their price advantage but given his statements/reaction and their current financial situation (-$1b) it seems likely for now.

 

[dobwal]

In the EG interview with Peter Moore, they asked him about the ps3 pricedrop and he turned it around as a value-add with the same price points. Which is true. Makes me think MS may try to follow the same path and simply upgrade the same sku's.

Perhaps:
add a memcard and game (pgr3, kameo) to the core w/hdmi

replace the hdd in the premium with a 60gb and a game (pgr3, kameo) w/hdmi

add the text pad and camera to the elite with a game (Forza2)


Personally I think this is the wrong path to take as it lessons their price advantage but given his statements/reaction and their current financial situation (-$1b) it seems likely for now.

Well, if MS simply moves the Premium to the $299.00 price point, the Elite to the original pricepoint and drops the core edition, you basically have the same scenario as Sony.

The core edition doesn't sell anywhere near the same level as the Premium and its advantage of a lower price point is negated by the presence of the Wii. Even if it is sold cheaper than the Wii, its highly doubtful it will contribute much to sales of the 360.

A $299.00 Premium is a much stronger competitor against a $250.00 dollar Wii then even a $199.00 Core.

 

[expletive]

It entirely depends on what their thought processes are with regards to their concept of "best served"; its the same old same old with regards to pricing and market adoption etc.

Besides, you can always price earlier, factoring in the differences that you know will come onstream soon.

Agreed, I've felt for awhile that the decision for MS to drop the price was either to try and maximize hardware sales for Halo 3 or maximize profit (minimize hardware loss still?) for Halo 3. MS could very well have come to the conclusion that the price drop they would intend, would not impact a Halo 3 hardware frenzy in any significant way, so why bother.

It seems that the conclusion they've arrived at instead is to opt for the 'double bump' strategy of release Halo 3, *pause*, price drop.

 

[infinity4]

price drop won't help sales now as much as it would do in november/december. we should wait to see if microsoft feel they really need to expand install base when they are getting comfortable figures every month in North America when it comes to PS3 vs X360.

maybe selling elite at 399, push premium down to 299 and killing core seems more appropriate to me

 

[Todd33]

http://www.thestar.com/Business/article/234980

Microsoft needs to lower Xbox's prices, ranging from $299 (U.S.) to $479, to increase sales and lure customers who aren't interested in traditional combat and racing video games, Shane Kim, vice-president of Microsoft Game Studios, said in an interview. He wouldn't say when a price cut may be announced. It won't happen at this week's Electronic Entertainment Expo, or E3, in Santa Monica, Calif., he said.

 

[quest55720]

Well, if MS simply moves the Premium to the $299.00 price point, the Elite to the original pricepoint and drops the core edition, you basically have the same scenario as Sony.

The core edition doesn't sell anywhere near the same level as the Premium and its advantage of a lower price point is negated by the presence of the Wii. Even if it is sold cheaper than the Wii, its highly doubtful it will contribute much to sales of the 360.

A $299.00 Premium is a much stronger competitor against a $250.00 dollar Wii then even a $199.00 Core.

I think a 199 dollar core with halo 3 and GTA 4 out would do very well. Not everyone wants to hook their console up the internet or has a high speed connection. My only gripe with the core is they do not include HD cables. Include HD cables and maybe a small memory card and price it at 199 and I think it could sell well. If you are not hooking your 360 up to the net I see no reason to need a hard drive at this point.

 

[pipo]

price drop won't help sales now as much as it would do in november/december. we should wait to see if microsoft feel they really need to expand install base when they are getting comfortable figures every month in North America when it comes to PS3 vs X360.

Europe is a bigger concern. They will drop the price this year.

And the Core will do fine this holiday over here.

I'm guessing the PS3 will see a price drop of 100 Euro and the 360 at least 50 Euro (maybe including the 64MB) to compete with the Wii.

Slightly related; is the 30 vs 60 FPS confirmed for Fifa?

 

[RobertR1]

A $100 price drop and Halo3 reviewing highly would basically hand them the holidays. Otherwise, if they stick to their price, they could be in a tight race, banking on Halo3 living upto the hype.

If the price remains as is and Halo3 isn't well received, then you can see market perception changing quickly on the 360.

I believe with the 65nm CPU/GPU, they'll be able to get their failures in check and drop the price. If they try to squeeze out the last dollar, they might pay for it heavily later on.

 

[scooby_dooby]

I think a 199 dollar core with halo 3 and GTA 4 out would do very well. Not everyone wants to hook their console up the internet or has a high speed connection. My only gripe with the core is they do not include HD cables. Include HD cables and maybe a small memory card and price it at 199 and I think it could sell well. If you are not hooking your 360 up to the net I see no reason to need a hard drive at this point.

Agreed.

I love how it's become internet 'fact' that no one will ever buy the core.

While everyone ignores the fact that most people interested in the core, are not buying a $299 console.

Once it gets down in price, to the real mainstream audience, the presence of a HDD is going to be much less of a factor.

 

[22psi]

X07 me thinks the price drop will be announced.

 

[dobwal]

I think a 199 dollar core with halo 3 and GTA 4 out would do very well. Not everyone wants to hook their console up the internet or has a high speed connection. My only gripe with the core is they do not include HD cables. Include HD cables and maybe a small memory card and price it at 199 and I think it could sell well. If you are not hooking your 360 up to the net I see no reason to need a hard drive at this point.

You have to factor in that the Premium will drop in price too and that a $299.00 Premium might over shadow a $199.00 Core like the Premium currently does.

Just because you drop a console's price into the mainstream price range doesn't mean the mainstream will adopt it.

The Wii is selling 300K+ at $250.00 in the US. If the 80/20 ratio of Premiums to Cores is to be believed then at only at $50.00 more the Core is selling a tenth of that. Dropping to $199.00, given that the Premium will drop too and in the presence of even a still $250.00 Wii, its hard to believe that the Core will do more than double its sales.

The Core is one of the cheapest skus of the current generation but by far is the worst selling sku of the current generation, so its not just a question of price but of value. Increasing demand will take more than just a simple price drop.

MS could widen the price difference between the Premium and the Core. But this is unlikely since the Premium is just a Core bundled with components that are cheaper to manufacturer than the price difference between the two skus. The premium has the greater flexibility when it comes to price reduction and is the defacto standard.

MS could cut the price of the accessories as well as cut the price of the Core. Thus allowing a cheaper sku with the ability to upgrade to premium specs at a cost that doesn't look like a rip off. Walking out the store with $199.00 Core, a $50.00 HD and a $60.00 GTA might be a better value for some then walking out the store with a $299.00 Premium and GTA. It definitely better than walking out with a $199.00 Core, a $25.00 Memcard and $60.00 GTA when for $70.00 more you could have the $299.00 premium with 19+ more Gigs, wireless controller, headset and HD cables. Components that when bought seperately can cost $160.00+.

 

[scooby_dooby]

You have to factor in that the Premium will drop in price too and that a $299.00 Premium might over shadow a $199.00 Core like the Premium currently does.

But $299 is still very expensive.

Remember that $299 was the previous launch price for all consoles, and most people never bought them at that price.

Most people have bought at $199 or less.

MS could cut the price of the accessories as well as cut the price of the Core. Thus allowing a cheaper sku with the ability to upgrade to premium specs at a cost that doesn't look like a rip off.

Bingo. That's really all they need to do.

 

[TheChefO]

But $299 is still very expensive.

Remember that $299 was the previous launch price for all consoles, and most people never bought them at that price.

Most people have bought at $199 or less.


Bingo. That's really all they need to do.

Good post.

Agreed.

$200 will sell a lot. Many consumer's will not spend over this price as a game will also cost them an additional ~$50. For this reason, I think Wii is also appealing to this crowd. MS could tap the same userbase by including a game (PGR3 / Kameo) and a memory card at the $250 pricepoint.

 

[dobwal]

But $299 is still very expensive.

Remember that $299 was the previous launch price for all consoles, and most people never bought them at that price.

Most people have bought at $199 or less..

You're right most people bought at $199.00 or below, but 25 million PS2 were sold prior to that first price drop in the US. Before the PS2 ever hit the US it sold in the neighborhood of $380.00 in japan and stayed at that price for almost a full year.

The GC started at $199.00 in the US and still hasn't hit 25 million.

 

[Rockster]

Rumor:
http://n4g.com/industrynews/News-51746.aspx

"A major Canadian retailer has confirmed that the Xbox 360 is set to receice an Official $100 price drop across all Skus as of August 1st. That will mean that the Xbox 360 core will retail for $199 (with a pack in memory unit) and be even cheaper than the Wii at $249 USD."