X360 price drop speculation

[AlNom]

Frankly, I thought MS would react during E3, now they might as well wait for some data from the retail channel. Of course, there's a general timeline (i.e. 65nm process with acceptable yields available), but it's not set in stone.

Put that way, I'd think Sony was testing the waters with the $100 drop to see if MS would commit to anything -> "Does MS feel threatened enough". And then we all got the news that it was only for the remaining 60GB stock...

But that's just paranoia coming out of my mouth.

I'm more influenced by the number 300.

Boy, if I got a £ for every Spartan...

That's not something I think happens though, and the CE companies seem to agree as they always target the same pricepoints.

I agree. We can even take a look at PC products that appear to follow similar pricing schemes regarding the 'highest' acceptable price for mass market penetration. Introducing new products, they always seem to be stuck at similar entry price points as prior products for that to happen.

 

[scooby_dooby]

Well many people still think the 360 name brand is having a hard time breaking out of the "FPS and racing game" stigma, the head MS marketing guy said the same kind of thing a week ago. I doubt the price is the issue, there is a $299 360 - no one wants it.

That's because today's consumer is value conscious. Espcially people buying at $299 or $399, as they're still the early adopters. They don't want the core because it's a horrible value when the premium sits at $399. Like I said, if MS adjusts the price of their peripherals, you'll see core's moving.

MS does not want to sell cores right now, they make more profit off the premium.

The issue is most certainly price, the 360 has nearly 200 games now, but as it's game library grows, it's sales shrink, and that's due to the demand at $400 drying up.

 

[scooby_dooby]

Inflation exists, but does it affect the mindset of consumers? I don't think so. To me, £300 now is the same as £300 yesteryear. Technically it may be less money, but I'm not perceiving it in absolute terms. I'm more influenced by the number 300. Over the years, I haven't seen prices increasing by 1.5% per annum for example. I don't see a thing for £300 in 1990, then 304.5 in 1991, £309 in 1992 and £314 in 93. I see the thing for £300 and remember that's what it was a couple of years ago. Now if shoppers compare prices to their income, then it may have an affect. If instead of seeing £300 they see 'one month's pay after expenses' one year, and '3 weeks pay' a few years later, than the pricepoint will appear to change. That's not something I think happens though, and the CE companies seem to agree as they always target the same pricepoints.

Thx Shifty

 

[borowki]

Inflation exists, but does it affect the mindset of consumers? I don't think so. To me, £300 now is the same as £300 yesteryear.

I wouldn't generalize it too much. Consumer electronics is a special case. People are used to gadgets becoming cheaper over time, ever while they're improving exponentially.

Given how prices for computers, DVD players, etc. have plunged over the years--even when measured nominally--consumer expectation of how much a game console should cost might actually be lower.

 

[dobwal]

I wouldn't generalize it too much. Consumer electronics is a special case. People are used to gadgets becoming cheaper over time, ever while they're improving exponentially.

What you are describing is not an aspect of inflation.

Given how prices for computers, DVD players, etc. have plunged over the years--even when measured nominally--consumer expectation of how much a game console should cost might actually be lower.

Consoles prices have plunged too and consumers are innately aware of the common cost model that existed for years which is new technologies are usually introduced to the market at fairly high price points.

 

[dobwal]

Inflation exists, but does it affect the mindset of consumers? I don't think so. To me, £300 now is the same as £300 yesteryear. Technically it may be less money, but I'm not perceiving it in absolute terms. I'm more influenced by the number 300. Over the years, I haven't seen prices increasing by 1.5% per annum for example. I don't see a thing for £300 in 1990, then 304.5 in 1991, £309 in 1992 and £314 in 93. I see the thing for £300 and remember that's what it was a couple of years ago. Now if shoppers compare prices to their income, then it may have an affect. If instead of seeing £300 they see 'one month's pay after expenses' one year, and '3 weeks pay' a few years later, than the pricepoint will appear to change. That's not something I think happens though, and the CE companies seem to agree as they always target the same pricepoints.

Inflation does affect the mindset of consumer just not in the way that people typically describe here on B3D.

You're right for the average consumer $300.00 dollars today is no different than $300.00 ten years ago. But what people do notice is that the "buying power" of $300.00 ten years ago was a lot more than the "buying power" that $300.00 dollars has today.

Im distinctly aware that years ago $10.00 would of easily bought me 10 gallons of gas, but today it costs me $30.00 for that 10 gallons.

 

[Cheezdoodles]

Inflation exists, but does it affect the mindset of consumers? I don't think so. To me, £300 now is the same as £300 yesteryear. Technically it may be less money, but I'm not perceiving it in absolute terms. I'm more influenced by the number 300. Over the years, I haven't seen prices increasing by 1.5% per annum for example. I don't see a thing for £300 in 1990, then 304.5 in 1991, £309 in 1992 and £314 in 93. I see the thing for £300 and remember that's what it was a couple of years ago. Now if shoppers compare prices to their income, then it may have an affect. If instead of seeing £300 they see 'one month's pay after expenses' one year, and '3 weeks pay' a few years later, than the pricepoint will appear to change. That's not something I think happens though, and the CE companies seem to agree as they always target the same pricepoints.

Ofcourse it affects the mindset of consumers, but not like in your example.

Inflation effects us subconcially, we might not run around and think about how bread price has gone up with 1.5% since last year, but you do notice it when you go grocery shopping and look at how much less your getting than you did 10 years ago for the same amount of money.

Overall, if your increase in wages don't beat inflation your getting poorer, no matter if you do the math or not, in reality thats what happening, those $300 today can buy you less stuff than $300 in 1990.

 

[Rangers]

Are we really debating this?

Lets debate whether gravity really exists next, guys.

BTW, Shifty said "that's why CE companies always target the same pricepoints". Uhh no, that's why we have a $600 PS3 and a $400 default Xbox360, with no price drop in 18 months now. Inflation. Seriously, how much have we discussed $600 PS3 and you never noticed it? Yeah,. people are up in arms about it but the fact it exists is something. The simple fact is, $600=$400 15 years ago, period. Expensive but not totally unreasonable.

 

[quest55720]

Are we really debating this?

Lets debate whether gravity really exists next, guys.

BTW, Shifty said "that's why CE companies always target the same pricepoints". Uhh no, that's why we have a $600 PS3 and a $400 default Xbox360, with no price drop in 18 months now. Inflation. Seriously, how much have we discussed $600 PS3 and you never noticed it? Yeah,. people are up in arms about it but the fact it exists is something. The simple fact is, $600=$400 15 years ago, period. Expensive but not totally unreasonable.

The problem is the established price of a console has been 199-299 over the last 25 odd years. This was not a slight increase but a doubling of the price in a small amount of time. People can point to MP3 player or cell phones but those have always been expensive and declined in price over time. Yes 600 is un reasonable when last gen the ps2 was 299 and had a next gen format and expensive processors including the monsterous GS. They want to raise prices fine but it had to happen over time. 299/399 this gen then 349/449 next ect. It is sticker shock to most people imagine if the next gen IPODS came out at double the price of this years. People would be up in arms over such a price increase. Also add to the fact most people purchased the PS2 at 199 or less and well you have what is happening today.

 

[Cheezdoodles]

Im distinctly aware that years ago $10.00 would of easily bought me 10 gallons of gas, but today it costs me $30.00 for that 10 gallons.

Thats not really due to inflation, thats due to higher oil prices (you could argue that they to, as everything are influenced by inflation, but thats a very very small influence compared to other stuff, like war, unrest, natural disasters in the mexican gulf etc..).

 

[Cheezdoodles]

and the CE companies seem to agree as they always target the same pricepoints.

not really. CE in general just becomes cheaper with time, new tech is more expensive tho, but in 99,9% of all cases, if its an "upgrade" to an existing product (bluray\hddvd to dvd) its usually cheaper than the predesessor (first DVD players costed $3000 first bluray players costed $2000).

Further, all mayor CE companies have proper finance devisions, who certainly deflate their profits for inflation and rfr.

 

[zed]

OT - ppl think petrol is expensive now, i can remember the early 80s (here in nz u could only drive your car 3 days a week or something, depending on your licenseplate)

http://en.wikipedia.org/wiki/Image:Oil_Prices_1861_2006.jpg

 

[borowki]

BTW, Shifty said "that's why CE companies always target the same pricepoints". Uhh no, that's why we have a $600 PS3 and a $400 default Xbox360, with no price drop in 18 months now. Inflation. Seriously, how much have we discussed $600 PS3 and you never noticed it? Yeah,. people are up in arms about it but the fact it exists is something. The simple fact is, $600=$400 15 years ago, period. Expensive but not totally unreasonable.

But Japan has suffered deflation for much of the last decade. So for your theory to hold, consoles in that market must be sold at lower nominal prices.

 

[Rangers]

But Japan has suffered deflation for much of the last decade. So for your theory to hold, consoles in that market must be sold at lower nominal prices.

I didn't say anything about Japan.

Anyways maybe they are, durned if I know. In Yen terms, does the PS3 sell for less than the PS2 initially retailed for?

What's my "theory", anyway?

It would only be something like "the consoles are not necessarily as expensive as they would appear to be historically due to inflation".

Not that they cant be more expensive than in the past even when adjusted for inflation. Yeah, adjusted for inflation the PS3 is still going to be way more than the PS2, which was only 7 years ago. Just not, twice as much.

 

[Johnny Awesome]

There are a couple of schools of thought regarding pricing I think:

1) Get the price down as quickly as possible even at a loss or risk losing your customers to your competitor.

2) Get the price down when you can, but don't worry so much about. Eventually the price will be low and everyone that wants to play your system's games will buy it at the price they feel comfortable with.

It's pretty clear that Sony is in position 1). It's also pretty clear that MS believes they are in position 2).

One thing I do know is that there's only one console this year that you can buy for $399 that has Madden, Halo 3, and GTAIV and MS believes that will be good enough.

 

[Vic]

There are a couple of schools of thought regarding pricing I think:

1) Get the price down as quickly as possible even at a loss or risk losing your customers to your competitor.

2) Get the price down when you can, but don't worry so much about. Eventually the price will be low and everyone that wants to play your system's games will buy it at the price they feel comfortable with.

It's pretty clear that Sony is in position 1). It's also pretty clear that MS believes they are in position 2).

One thing I do know is that there's only one console this year that you can buy for $399 that has Madden, Halo 3, and GTAIV and MS believes that will be good enough.

It'll interesting to see what Sony does. IMO they need to get down to $399 and £300 by Christmas if they want sell bucketloads.

The flaw with MS's plan is that two of those games are multiplatform. Plus I dont see Halo 3 bringing many gamers in towards MS - its a game that has a strong following in terms of hardcore gamers (most of whom already own 360's). If Sony can get GT5 Prologue right, and keep it at a low price, (£14.99 or less) I think it'll have a biger worldwide impact than Halo because its massive all over Europe, and could Sony the boost they need in Japan.

 

[Cheezdoodles]

OT - ppl think petrol is expensive now, i can remember the early 80s (here in nz u could only drive your car 3 days a week or something, depending on your licenseplate)

http://en.wikipedia.org/wiki/Image:Oil_Prices_1861_2006.jpg

Stop whining. We pay $2 for a litre of gasoline, meaning $9 to the gallon. And this is normal. We had it at $3 and $4 per litre in rough times.

And this is in Norway, with 70% of the industry revolving around pumping out oil from the sea.

 

[dobwal]

Thats not really due to inflation, thats due to higher oil prices (you could argue that they to, as everything are influenced by inflation, but thats a very very small influence compared to other stuff, like war, unrest, natural disasters in the mexican gulf etc..).

You right it not due to general inflation per se (its more of a catalyst for inflation). But I was using it more as an extreme example of noticeable change in "buying power" over time.

I guess a more proper example that uses both concepts would be the buying power of a dollar 20 years ago when I was a tot buying penny candy.

 

[archangelmorph]

There are a couple of schools of thought regarding pricing I think:

1) Get the price down as quickly as possible even at a loss or risk losing your customers to your competitor.

2) Get the price down when you can, but don't worry so much about. Eventually the price will be low and everyone that wants to play your system's games will buy it at the price they feel comfortable with.

It's pretty clear that Sony is in position 1). It's also pretty clear that MS believes they are in position 2).

One thing I do know is that there's only one console this year that you can buy for $399 that has Madden, Halo 3, and GTAIV and MS believes that will be good enough.

I would say Sonys' in position 2) aswell, the way they've been handling things..

 

[Johnny Awesome]

Maybe, but they are getting ravaged in their home market, unlike X360 which is still doing quite well.