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PenguinZ said:
SWORDF1SH said:
PenguinZ said:
Microsoft can afford to absorb losses... Sony can't.

Silly argument that I see keep popping up. Do people really think that MS had a price drop to just chuck money away? No, they did it to make their install base bigger and therefore make more money on software sales  and live subs.

What Sony have to decide is that if they drop their price, how much would they need to so that profit from increased install base outweights the loss they would from profit from console pric drop. It seems that its not time for a price drop.

For MS a price drop is more beneficial and an easier decision to make.

This also has nothing to do with arrogance and anybody with a slight understanding of business can see why.

What's silly about it? Sony is still in a bad state as a company. The PS4 has been doing extremely well for them. Microsoft on the otherhand has been getting crushed, so they needed to do something. The price cut clearly helped them a lot with sales. Microsoft is likely happy with the results, but I'm sure they lost money doing it.

Now if Sony were in better shape financially, the question would be this: Would Sony have matched Microsoft's price cut this holiday in the US in an attempt to completely shut the door on Xbox. I think they actually might have, and I think it would've worked.

BTW, I don't think Sony was arrogant, nor have they really been arrogant in general, and I do believe that they made a good decision this holiday season.

I agree with most of what you are saying but my point is that a price cut is not used to just throw away money. Sony could of easily cut the price and even matched Xbox's price but they more than likely weighed up that if they did, they extra money from software sales and ps+ isn't the most optimum way to make profit. On the other hand it was for MS. Sony do not want to get into a price war, lowering the price of their product will have a knock on effect. It's pretty silly to have a knee jerk reaction to everything your competitor does and to do so this early in the life cycle. They are happy to let MS have this holiday, keep the price of their product high and use a price cut as a weapon when they really need it.