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Forums - Sales Discussion - Could a price cut actually hurt the PS3?

yeah, i doubt MS is scared about losing money. If they are able to use a price drop to get a bigger lead on PS3 i think they will do it. This is only MS's second system, and i think they want to establish themselves as one of the leaders before they start trying to make money.



currently playing: Skyward Sword, Mario Sunshine, Xenoblade Chronicles X

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rocketpig said:

My point is that it would be a monumental mistake for a company that is losing money on a product (Sony) to attempt to get into a price war with two companies who not only offer a cheaper product, but also make money at their current price points (MS and Nintendo).

If MS and Nintendo want to play hardball in a price war, they have a lot more leeway to do so than does Sony. 

But this isn't a company that has to rely solely on their gaming division, which is also true for Microsoft but the same really can't be said about Nintendo. Like I said, Microsoft continuously lost money on the Xbox, and even now, though they are getting a profit for each console sold, it isn't even remotely close to wipe their slate clean.

So Sony will lose more money if they lower the price for the PS3, boo-hoo. If it will work, it will work, and if not, who cares, that's a multi-billion dollar company, I think they will manage.



You are assuming that if sony dropped their price by 100, then Microsoft and Nintendo would also drop the price by 100. So if sony dropped by $250, then Wiis would be given away for free right?
I think right now Sony is realizing that you can't sell a system on promises alone, and they are talking intensly with 3rd parties to make some really good games.


Poseidon said:

rocketpig said:

My point is that it would be a monumental mistake for a company that is losing money on a product (Sony) to attempt to get into a price war with two companies who not only offer a cheaper product, but also make money at their current price points (MS and Nintendo).

If MS and Nintendo want to play hardball in a price war, they have a lot more leeway to do so than does Sony.

But this isn't a company that has to rely solely on their gaming division, which is also true for Microsoft but the same really can't be said about Nintendo. Like I said, Microsoft continuously lost money on the Xbox, and even now, though they are getting a profit for each console sold, it isn't even remotely close to wipe their slate clean.

So Sony will lose more money if they lower the price for the PS3, boo-hoo. If it will work, it will work, and if not, who cares, that's a multi-billion dollar company, I think they will manage.


Sony may be a big company, but it only has a $5-6 billion cash reserve. Nintendo, a much smaller company has a cash reserve around $7 billion. Microsoft has a $38 billion cash reserve. 

Just because a company is big and has a lot of divisions does not necessarily mean it's in a better position to take losses. If a company runs out of cash, it goes downhill fast.  



The PS3 was already $500 once and no one cared about it then, either. The 20 GB (which still exists) is something like $420 in Japan right now and total it's only selling 10-12k a week there.



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No way WII price cuts at the current demand. And the 360 only recently started turning a profit, I don't see MS taking losses again.



goodridd said:
And the 360 only recently started turning a profit, I don't see MS taking losses again.

You clearly don't know anything about Microsoft to be saying that. If Microsoft has to lose money to crush the competition (or to not be crushed), they just do so...



My Mario Kart Wii friend code: 2707-1866-0957

PS3 do need a pricedrop to increase its sales, but that could hurt Sony too much. If we look at Japan, i believe 80$ pricedrop (transfers 100$ to US), would boost sales for 2 weeks up to 50000 a week, when everyone who waits for the first drop would rush to buy one. After that sales would be roughly double compared to what they currently are. 50% price drop doesn't mean that double the people would buy the console, it's more like 10 times the people would buy it. 100$ drop is something i think would double the current sales. The lower the price goes, more people see console affordable. But if Sony would drop the price and take more loss from PS3, it would affect their ability to compete in long term. So it's better for them not to take even bigger loss from PS3, even that sales would increase, and they would make more money with games, by lowering the price.



Ei Kiinasti.

Eikä Japanisti.

Vaan pannaan jalalla koreasti.

 

Nintendo games sell only on Nintendo system.

Poseidon said:

So Sony will lose more money if they lower the price for the PS3, boo-hoo. If it will work, it will work, and if not, who cares, that's a multi-billion dollar company, I think they will manage.

Great perspective you’ve got there.

Are you suggesting that a price drop would have negligible risk?

Somehow I don’t see Sony execs sitting around the table saying “lets just go for it, and if it doesn’t work, who cares - we can manage”.



The PS3 was already $499 and that did not help the sales any. The PS3 will need a $200 price drop before sales increase.