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Forums - Sales Discussion - Global Hardware 13 October 2018

Kerotan said:
PortisheadBiscuit said:

A company like Apple isn't interested in being the top seller? Mmmm okay...

Clearly not. Profits > unit sales for them. If they wanted they could sell a shit ton more iPhones at a profit if they took $200 off their price tag. Instead they opt for less sales and huge profit per phone. 

So you've contradicted yourself, you said Apple offers the best value while at the same time admitting Apple has the highest profit margins. How is that the best "value" if customers are technically paying more for a product that isn't necessarily better than the competition? You are in essence saying Nintendo offers the best value since their products generally cost more than the competition, no? 



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PortisheadBiscuit said:
Kerotan said:

Yeah give it away in exchange for money. It's how business works. 

Business also works where profit is more valuable than just revenue.

So lets see.... if sony decides to "give away" the PS4 and say sell it at $150 ad take a loss of around $20 per console.... hell they even throw in spiderman which is a first party game for them and they own the IP at no extra cost and maybe pay insomniac $10 in royalties for every copy of the game they ship with the hardware. So that takes the loss up to $30 per console. And sell around 10M of that particular loss leading sku to a tune of $300M in losses. 

How many of those 10M new PS4 owners do yopu think will buy at least 1 other game in say the next 3 months? Or an extra controller, or god forbid a PS+ subscription?

There are multiple ways to be profitable..... especially when it comes to consoles.



PortisheadBiscuit said:
Kerotan said:

Clearly not. Profits > unit sales for them. If they wanted they could sell a shit ton more iPhones at a profit if they took $200 off their price tag. Instead they opt for less sales and huge profit per phone. 

So you've contradicted yourself, you said Apple offers the best value while at the same time admitting Apple has the highest profit margins. How is that the best "value" if customers are technically paying more for a product that isn't necessarily better than the competition? You are in essence saying Nintendo offers the best value since their products generally cost more than the competition, no? 

I don't think you understand economics. We're talking the consumer here not literally. Value to the consumer is the perceived bundle of benefits they get in return for their money. 

 

"Perceived value is the benefit that a customer believes he or she received from a product after it was purchased."

 

So to the high end customer who buys apple products, despite it being more expensive they view the iPhone as the most valuable purchase from their point of view. Status, culture, self image, software, hardware, price etc are all  just a few of the benefits they perceive.

 

This is why apple are genius. They sell the most profitable phone to a large group of loyal customers who see the purchase as valuable to them. Apple would prefer to be the most profitable company rather then the company who sells the most units. If they can have both then great. 



Intrinsic said:
PortisheadBiscuit said:

Business also works where profit is more valuable than just revenue.

So lets see.... if sony decides to "give away" the PS4 and say sell it at $150 ad take a loss of around $20 per console.... hell they even throw in spiderman which is a first party game for them and they own the IP at no extra cost and maybe pay insomniac $10 in royalties for every copy of the game they ship with the hardware. So that takes the loss up to $30 per console. And sell around 10M of that particular loss leading sku to a tune of $300M in losses. 

How many of those 10M new PS4 owners do yopu think will buy at least 1 other game in say the next 3 months? Or an extra controller, or god forbid a PS+ subscription?

There are multiple ways to be profitable..... especially when it comes to consoles.

The demo changes when you price your console in the $199 range. More influx of budget gamers, impulse buyers, low income families etc; There's not a garauntee buyers will add money to the back end. There's a reason Sony has limited runs of loss leading bundles. Sony understands business a lot better than their proponents do apparently.

 

This still avoids the original point I was intending to convey in the first place. Nate4Drake was insinuating Smash isn't a threat for the holidays due to Sony being able to sell PS4s at such a heavy discount bundled with AAA titles. That's a lot of effort on Sony's part just to keep Smash at bay.. 



Kerotan said:
PortisheadBiscuit said:

So you've contradicted yourself, you said Apple offers the best value while at the same time admitting Apple has the highest profit margins. How is that the best "value" if customers are technically paying more for a product that isn't necessarily better than the competition? You are in essence saying Nintendo offers the best value since their products generally cost more than the competition, no? 

I don't think you understand economics. We're talking the consumer here not literally. Value to the consumer is the perceived bundle of benefits they get in return for their money. 

 

"Perceived value is the benefit that a customer believes he or she received from a product after it was purchased."

 

So to the high end customer who buys apple products, despite it being more expensive they view the iPhone as the most valuable purchase from their point of view. Status, culture, self image, software, hardware, price etc are all  just a few of the benefits they perceive.

 

This is why apple are genius. They sell the most profitable phone to a large group of loyal customers who see the purchase as valuable to them. Apple would prefer to be the most profitable company rather then the company who sells the most units. If they can have both then great. 

Lol at not understanding economics as if you've provided Socrates level of insight yourself. 

 

So you're admitting Nintendo is genius as well. They have very similar business practices as Apple, rarely incentivizing their loyal fanbase. They don't (and won't) sell their hardware at a loss to compete. Whereas Sony and Microsoft have been doing this since the beginning, taking me back to my original point which started this stale dialogue. Sony giving alot more to compete with Smash, and nulling Drake's point of Smash not competing with AAA titles. 



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Intrinsic said:
zorg1000 said:

New console is such a lame reason, like sales are just going to all of a sudden plummet because this is its 2nd holiday.

This holiday season is a totally different animal though. Last season PS4 had a $199 deal only for a few days and nothing major in the software front outside COD.

This year if they extend that $199 spiderman bundle through the entire season coupled with the game that is going to be on everyones lips RDR2 and crazy discunts on GOW......gotta admit thats a hard combinatioon of factors to beat.

And if there is a big spiderman red logo on that $199 PS4 thats gonna be ahard thing to talk kids out of.

What in the world makes you believe they will have that deal for the whole season? That's not happening.

Also last year from Sept-Dec had COD: WWII, Destiny 2, AC Origins, Battlefront 2, Shadow of Mordor, Wolfenstein 2, Evil Within 2

Compared to BLOPS4, AC Odyssey, RDR2, Fallout 76, Battlefield V, Shadow of Tomb Raider, Just Cause 4

You could certainly argue this year is stronger but only slightly.



When the herd loses its way, the shepard must kill the bull that leads them astray.

PortisheadBiscuit said:
Nate4Drake said:

New console.  

This Holiday Season Sony have more powerfull AAA titles to bundle, and more margin on Hardware revenue and can be even more aggressive. You will see.

So basically you're saying Sony has to give away their hardware to be able to compete with Smash and Pokemon this holiday? Interesting... 

I didn't say exactly that :)

 I said Sony can be more aggressive, and they will.   



”Every great dream begins with a dreamer. Always remember, you have within you the strength, the patience, and the passion to reach for the stars to change the world.”

Harriet Tubman.

zorg1000 said:
Intrinsic said:

This holiday season is a totally different animal though. Last season PS4 had a $199 deal only for a few days and nothing major in the software front outside COD.

This year if they extend that $199 spiderman bundle through the entire season coupled with the game that is going to be on everyones lips RDR2 and crazy discunts on GOW......gotta admit thats a hard combinatioon of factors to beat.

And if there is a big spiderman red logo on that $199 PS4 thats gonna be ahard thing to talk kids out of.

What in the world makes you believe they will have that deal for the whole season? That's not happening.

Also last year from Sept-Dec had COD: WWII, Destiny 2, AC Origins, Battlefront 2, Shadow of Mordor, Wolfenstein 2, Evil Within 2

Compared to BLOPS4, AC Odyssey, RDR2, Fallout 76, Battlefield V, Shadow of Tomb Raider, Just Cause 4

You could certainly argue this year is stronger but only slightly.

Errrrrrr........

I didn't say they will extend that deal all season. I said "if".......

RDR2 trumps evrything else this year and last year. Combined. Andifyou don`t know that then you shopuldn't be talking sales. In 3 days the game mde almost a billion dolllars in revenue. That means it sold at least over 10M copies. 

In 3 days.

Prior to its release, GTA5 was still topping finding its wa into the top 10 amost evry single month. Over 5 years after its release.



Intrinsic said:
zorg1000 said:

What in the world makes you believe they will have that deal for the whole season? That's not happening.

Also last year from Sept-Dec had COD: WWII, Destiny 2, AC Origins, Battlefront 2, Shadow of Mordor, Wolfenstein 2, Evil Within 2

Compared to BLOPS4, AC Odyssey, RDR2, Fallout 76, Battlefield V, Shadow of Tomb Raider, Just Cause 4

You could certainly argue this year is stronger but only slightly.

Errrrrrr........

I didn't say they will extend that deal all season. I said "if".......

RDR2 trumps evrything else this year and last year. Combined. Andifyou don`t know that then you shopuldn't be talking sales. In 3 days the game mde almost a billion dolllars in revenue. That means it sold at least over 10M copies. 

In 3 days.

Prior to its release, GTA5 was still topping finding its wa into the top 10 amost evry single month. Over 5 years after its release.

GTAV would have had at least 150 million PS3 and 360 owners to sell to at launch. Right now RDR2 only has around 120 million PS4 and XB1 owners to sell to. By the end of this gen, RDR2 should have a similar size audience to sell to as last gens total. Plus potentially being ported or transferred to XB Scarlet and PS5.



Intrinsic said:
zorg1000 said:

What in the world makes you believe they will have that deal for the whole season? That's not happening.

Also last year from Sept-Dec had COD: WWII, Destiny 2, AC Origins, Battlefront 2, Shadow of Mordor, Wolfenstein 2, Evil Within 2

Compared to BLOPS4, AC Odyssey, RDR2, Fallout 76, Battlefield V, Shadow of Tomb Raider, Just Cause 4

You could certainly argue this year is stronger but only slightly.

Errrrrrr........

I didn't say they will extend that deal all season. I said "if".......

RDR2 trumps evrything else this year and last year. Combined. Andifyou don`t know that then you shopuldn't be talking sales. In 3 days the game mde almost a billion dolllars in revenue. That means it sold at least over 10M copies. 

In 3 days.

Prior to its release, GTA5 was still topping finding its wa into the top 10 amost evry single month. Over 5 years after its release.

Coming up with hypothetical scenarios that have no chance of happening isn't a real counter argument. It's like me saying Switch will win if its $199 with Smash bundled, we know that's not happening so no point in bringing it up.

I'm well aware that RDR2 is huge but we are talking about December, a month that Switch won last year globally with no discounts, bundles or major releases.

I dont really see how GTA is relevant to this discussion.



When the herd loses its way, the shepard must kill the bull that leads them astray.