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Forums - Sales Discussion - Is $500 too much?

 

$500 for a game system is...

OK. 66 13.31%
 
I will pay anything for Halo! 11 2.22%
 
I will pay anything for Sony! 59 11.90%
 
OK for launch, but it better come down quick! 97 19.56%
 
Too Much!! 263 53.02%
 
Total:496
LemonSlice on 08 April 2013

I thought MS was in a better position at pricing their next gen system. If it's really 500$, how can PS4 be anything lower than that?

Seems like subscription based models will play a big role next gen. Wonder how people will take it.



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SSJGohan3972 on 08 April 2013

Too much for me? Yes, I don't buy systems for more than about $350 (and I have yet to pickup a 360 although I plan to)

Too much for the market? Probably not, there will be some backlash but the first year sales or so will be your more dedicated customers that will pay those prices, plus if they launch at ~$500 (or more) Nintendo will most likely do nothing with their own price, launching lower might entice Nintendo to lower their price and take some of the wind out of the PS4/NextBox sales/sails :)



Systems Currently Playing: WiiU, PS3, 3DS

Also Have: Atari 2600, NES, SNES, PS1, N64, PS2, Wii, GB, GBC, GBA, DSLite, DSi, Android (RazorMax), iPhone (4), iPad (2)

Conegamer on 08 April 2013
M.U.G.E.N said:
Really can we NOT make everything about one fanbase against another? A number of people with pro xbox signatures have said the exact opposite too..means absolutely nothing

anywho yes I think $500 is absolutely too much. Heck I think anything over $399 is going to be a bad price point

I pretty much agree with everything you said here. So yeah.



 

Here lies the dearly departed Nintendomination Thread.

KHlover on 08 April 2013
Chark said:
KHlover said:
Chark said:
I don't think $500 is too much. Giving inflation and the general components in these machines $500 sounds right. It isn't as expensive as people might like to complain about. The economy is improving and even during the bad times there were plenty of people dropping $500-$600 on iPads and iPhones every year to record numbers.

You can't compare an iPad/phone with a dedicated gaming device. Entirely different products which are valued entirely different by the mass market.

Short form:

Smartphone/Tablet-PC -> Important
Gaming console -> Not nearly as important

(Keep in mind this is the perception of the mass market, not my own oppinion)

Of course you will spend more money on an important device, so iPads get away with costs of 500€+ while consoles absolutely don't.


Well to me and I'm sure a decent amount of consumers the game console is more important of the two options. Pricing the console high is a good business practice, to an extent.

To start, the cost of making the console is probably also high, pricing the device to low will cost the company a lot of money. I know the razor's edge method has its merits, but even at $500 a console could be employing that method, just look at the PS3's manufacturing cost of $800-$840. It shouldn't be that bad this time, but you get what I mean.

Next, there is a dedicated consumer base that will purchase the device at launch. Not for any price, but even a high price. Price the console low and you miss out on that revenue stream and attract more consumers at a greater loss per console.

Third, the high ground will allow the company to react to consumer demand. Not only do they avoid the money bleeding but they gain the advantage of more timed price cuts throughout the systems life. If the console is priced low and yet consumer demand wanes then it will be difficult to lower the price without breaking the bank or it will take a long time for the costs to go down to justify it. Just look at the Vita, great price but it stopped selling and consumer opinion thought it was expensive but Sony couldn't justify an early price cut. If they priced it at $300 to start they could have easily made a $50 price cut before the holidays that would have garnered them attention.

Lastly, there is competition. When the Vita announced its $250 price it was received extremely well. It wasn't until after Nintendo made their price cut down to $170 from $250 that it was perceived expensive. Both the PS4 and the Xbox 3 are in a similar situation as the Vita, not exactly but similar. If they price it too low they might get a reactionary price cut from Nintendo since the Wii U isn't selling so hot. The Wii U is most likely the cheapest console to produce and can out price their competitors. Given the success the 3DS had doing the same, all they need is a push and the right time to do it. Now I don't think either new console will be the $300-$350 price of the Wii U. But if they did edge that price, expect a Wii U price drop and consumer attention to shift away from what they now perceive as the expensive consoles.

B1: Total smartphone sales in 2011 were 491 Million units (Source Source of the source), so no the majority definately prefers smartphones and tablets (At least 119 Mil sales in 2012).

B2: Remember the PS3 launch? Yeah...

The rest of your post sounds about right, but making the consoles more expensive to have a room for price cuts won't be working so well. From what we know (at least about the PS4) the costs to build it still exceed $500, the high ground would be  ridiculously high. Initial sales would be devastating. Also, since the compatition is already priced ridiculously low in comparison  (A new 8GB WiiU costs me 200€ in Germany) a price cut from "ridiculously high" to "still pretty high" won't have quite that much of an impact.

-> No choice but to subsidize the Next-Gen consoles, the mass market won't allow Sony (and Microsoft) to play it safe.



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MoHasanie on 08 April 2013

I think its too much. And if the weaker console (720) is $500 then I expect the PS4 to be even more than that cause the PS4 will bundle the PS Eye with the console as well. So, if the Nextbox is $500, I expect weak sales. For me, I will not purcahse either console until they hit $400 or less.



    

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superchunk on 08 April 2013

I paid $250 for Wii, $350 for PS3, and $350 for WiiU.

All had at least 3 specific games I wanted the day I bought them.

That is about the price range I'd stick too no matter who made the console.

Around $300 is the sweet spot for me with some quality games, so yeah... no 2nd console will be considered by superchunk until 2015 at the earliest. (I won't sign a contract for one either)



dsgrue3 on 08 April 2013

Depends how much I want it. If I can spend $900 on a couch, I can certainly justify spending $500 on a console. But I'm definitely hesitant to do so.

I'd prefer $400. That is okay...or less.



VGKing on 08 April 2013

If one is $500 and the other is $400 then yes, it is too much. If both are $500, then it is a good price. The consoles will go down in price eventually and the mainstream will be happy buying low-priced PS3 and 360 for at least 2 more years.



Sal.Paradise on 08 April 2013

I think $399 is the sweet spot for these machines, and $499 will just not be acceptable as a base price to consumers.



VGKing on 08 April 2013
LemonSlice said:
I thought MS was in a better position at pricing their next gen system. If it's really 500$, how can PS4 be anything lower than that?

Seems like subscription based models will play a big role next gen. Wonder how people will take it.

The Xbox 720 will include the new Kinect in every box. Expect this to bring prices up similarly to the Wii U Gamepad does for the Wii U. Then there's rumors that it will include a TV tuner or something in there. That will be expensive.

Expect Ps4/720 to be roughly equal in price. PS4 is the more powerful console, but the price difference will be minimal on the barebones consoles without accessorires and add-ons.