Argh... you can't remove everything but price from the equation. If the 360 was selling a Core levels, it wouldn't have the stellar lineup it has going.
Xbox 2007 or bust?
- Thread starter blakjedi
- Start date
Argh... you can't remove everything but price from the equation. If the 360 was selling a Core levels, it wouldn't have the stellar lineup it has going.
The logic applies to competing consoles not the console by itself. Demand varies for differing consoles at any one price that doesn't happen when looking at a single console.
My wording may have been a little off, not "capture the market" but "the market had effectively been decided" as there was little that the xbox and GC could have done to change the momentum that the PS2 had already generated.
Even if that was true, how does that make the Core SKU useless? You're not seriously arguing that the Xbox 360 Core and the Xbox 360 Premium are competing consoles, are you?
Yet the Core continues to sell poorly despite its stellar lineup. The Core is being propped up and being sustained by the Premium .
Its hard to imagine that a woefully selling console released at a reasonable introductory price is suddenly going to find legs at $199.00.
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It doesn't make it useless, but its not going to suddenly fly off the shelves just because you drop it to $199.00.
The Core and the Premium are competing against each other for sales. Just because they fall under the 360 brand doesn't mean they don't compete. Minus the "Premium", the Core sales would be a lot higher.
If 90% of the 360 sold were Cores, MS strategy related to the 360 would be a little different.
The only reason the Premium is outselling the core is because the premium is a better deal. With a drop in prices on the accessories and a powerful pricedrop on the core, it would outsell the premium.
Wow instead of admitting that the 360 currently has the biggest user base for a next gen console they start trying to change the parameters. They throw in handhelds throw in last gen consoles being sold for 99$ just to skew the fact that the 360 currently has the largest user base for a next gen console.
Does it hurt that much for some of you that Sony is NOT the market leader this gen?
Is it that big a deal to give the 360 it's due as the current next gen console sales leader?
Doesn't it seem silly to say the 360 has a do or die holiday when the PS3 is flopping so bad around the world?
Does it hurt that much for some of you that Sony is NOT the market leader this gen?
Is it that big a deal to give the 360 it's due as the current next gen console sales leader?
Doesn't it seem silly to say the 360 has a do or die holiday when the PS3 is flopping so bad around the world?
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Again, duh! The real question is: Without the core, would those who have bought it by a premium instead? Right now, perhaps most of them would have, but as the prices go down this will be less and less so. And that's disregarding the fact that MS make more/loose less on the Core to begin with.
As long as their prospective audiences doesn't entirely overlap, the Core and the Premium are complementary SKUs, not competing ones. As I said: The core is there to eventually target the customers the Premium cannot reach.
First, MS bundled a $180 dollars worth of peripherals (standalone prices) into the Premium for $100.00.
Second, the standalone prices have huge profit margins built in that it makes piece mealing a Premium from Core almost unreasonable. Look at the setup, what peripherals can you buy along with the Core and not be close to the Premium price tag.
The whole strategy of MS's pricing is to get you to buy the Premium and as of today that strategy has worked. What makes you think MS will forego this strategy to push the sales of the Core. If the Core sells it will have to do as the stepchild of the 360 brand and a total surprise to MS. MS will do nothing to the Core to push sales that it won't do for the Premium.
The Core dismal sales are directly tied to MS's strategy to push the Premium first, so a mega drop for the Core will see a mega drop for the Premium. Its isn't the Wii or the PS3 that the most effective rival of the Core, its the Premium. Look at 2005-2006 when the Wii and PS3 were absent from the market.
First, MS makes more with the premium as its has built in profit margins from the peripherals bundled with it. It doesn't cost MS $100 to put a HDD, HD cables, wireless controller, a headset and month of Live into the Premium, probably 1/2 that. The base components for the Core and Premium cost MS the same minus the chrome trim.
Without the Premium, most would have bought the Core and MS's pricing strategy for its peripheral would be a lot different. The prices would have been a lot less on the peripheral as the Core only sku would have forced every 360 Live user to purchase additional peripherals. You don't promote a service as significant for MS as Live b7 putting outrageous prices on Live affliated peripherals. MS can afford to now as 90% of user are Premium buyers not Core buyers.
Well the question is if you lower the price of both SKUs but keep Premium as better value/money, do you think Core will outsell Premium?
It is common to keep expensive unit better value/money, somewhat like a bundle, that is unless you are Sony.
While it is funny to see such reaction to xb360 outselling ps3, I would have to say that ps3 still does have quite a few advantages:
Japan
Europe
Value perception
Brand strength
1st party dev team
Bluray
Now, all things being equal, ps3 will dominate sales with these advantages. Good thing for MS is, currently, they aren't equal. Ps3 entry point is still "expensive" in comparison to xb360 and games selection still favors xb360. With time though, they will not hold these advantages.
I figured the price advantage would be addressed this past spring with both getting a $100 drop. Such a move would have been beneficial for ps3 (see current sales), but would have been dominant for xb360 come Christmas. Seeing that MS has not acted on this timeframe many months later and is rumored to be offering up a pathetic price drop in the near future, I have real concerns over their longterm strategy for this gen.
Contrast such a lax attitude with Sony ($100 price drop) and you'll see a big difference. Factor in the $200 PS3 BOM reduction by years end and it's easy to see how one can view this as a closing window of opportunity. It seems likely that we will see a $300 ps3 on the shelf next year. At such a pricepoint, I expect sales to be brisk. Factor in the ps3 software lineup for 2008 and there is a real sense of urgency for MS to get their act together asap.
They have five months to seal the deal in NA.
Japan is lost and will forever be lost. EU is still Sony-land regardless of the price advantage (pathetic IMO).
It seems they are content to just coexist. Sony is not. Proof?
6 months after xb1 is launched and Sony is sitting on a ~20 million unit head start. Xbox sales are pathetic in comparison and falling. What does Sony do? $100 price drop. This move crushed xb1 and financially put MS in a perminant hole with the xbox project. Everyone knows the rest of the details.
Point is, momentum is key. When it's lost, it is near impossible to get back. Some might say ps3 lost momentum so how can one expect them to get it back? My answer is they never had it to begin with. Reason for the lack of momentum wasn't anything beyond sticker shock though. If they are able to erode this sticker shock as rapidly as some predict, MS will be in for a rude awakening in 2008.
Assuming they don't wake up before then.
OK I'm repeating this one more time and I'm going to sleep:
$299 is not a good price for what the Core is. This doesn't make the Core "crap".
$199 is a much better price for what the Core is. It will sell much better at $199.
$99 is a wonderful price for what the Core is, it would spread like wildfire at $99.
The targeted audience for a handheld and a console is very different. I like how you ignored the rest of my post btw..
Oh, and while i don't believe you are a moron, i find it rather humurous, that a person who is able to find this site, register, and log in, is unable to accept that the Xbox 360 has the largest userbase of the next gen consoles right now.
(that that i in anyway shape or form, believe that it really matter, who has the biggest userbase, right now)
Never said it was crap, just that its the stepchild in MS's lineup.
Its a given it will sale better, there is no disputing that. However, it won't come close to a Premium that in all likelihood will have a similar price cut.
Now at this price point, I can see legs growing on the Core buts thats totally dependent on the timing of the price drop.
I dont think you understand the point of the core. The point of the core pack is that harddrives "never" goes down in manufacturing price, they just get bigger.
The reason the core is there, is so when the PS3 and X360 price war begins, MS can undercut any PS3 offering. Assuming that the premium will have the same price cuts as the core is going against the whole point of the core.
RancidLunchmeat
Veteran
I really don't see how you can understand that the Premium is selling better now because it is a better value than the Core, but not concede that at a point in the future, the Core would sell better if it becomes the better value?
Also, MS wants every user to be a Live! user (because that's their true intention in entering this market to begin with, because that's their real profit stream, etc.. ) But they know that isn't going to become a reality this generation.
How many of the Xbox users from last generation went online? How many PS2 users? How many 360 users are active on Live! ? MS won't tell us.
So to say that the Core isn't attractive (at any price point, ha!) because people want headsets and Live! membership and a HDD, is to ignore that probably HALF of all users this generation won't go online at all.
Believe it or not, but there's a certain group of people that don't want to pay for things that they aren't going to use. And believe it or not, that group of people might actually big the biggest demographic of all!
Also, MS wants every user to be a Live! user (because that's their true intention in entering this market to begin with, because that's their real profit stream, etc.. ) But they know that isn't going to become a reality this generation.
How many of the Xbox users from last generation went online? How many PS2 users? How many 360 users are active on Live! ? MS won't tell us.
So to say that the Core isn't attractive (at any price point, ha!) because people want headsets and Live! membership and a HDD, is to ignore that probably HALF of all users this generation won't go online at all.
Believe it or not, but there's a certain group of people that don't want to pay for things that they aren't going to use. And believe it or not, that group of people might actually big the biggest demographic of all!
Though only by $30 when the other components have reduced. That's the whole difference the HDD makes. If its a choice between a $100 console or a $130 console, is it going to make that much difference? Or will people buy the system that has the momentum or preferred library, and not worry about an extra $30 or not?
I think the real reason for losing the HDD was profitability. A slightly lower price won't affect the sales versus the competition, but does mean at the standard price-points, MS are making an extra $10+ per machine sold. That is, when Core is $199.95, they won't have the expense of the HDD taking from their profits, whereas if XB360 had an HDD as standard, they'd still have to sell at $199.95 because it's a golden price-point I guess, and they won't slap the price of the HDD on top and sell for $229.95. The price-point is inflexible, so the way to maximize returns is to minimize the cost of the hardware.
Of course, that contradicts the first point that people don't mind about an extra $30 here or there, but I think sales people are caught up in their magic price-brackets. Everything being sold at $200 could be sold at $210 and make a bit more money without affecting sales (I imagine. Maybe people really are deterred away from absolute price brackets?) but prices are always set by these standards.
Exactly, it exists as a SKU that MS can use as a lowest-price figure.
It will however, always be comfortably outsold by the Premium.
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