Last year for the 10 weeks for Christmas.

Long term vs short term, in the short term you can have a massive spike in sales due to a price cut and in the longer term total revenue from hardware falls whenever the price is cut. Therefore a 25% cut for the PS3 in price given that both the PS3 and Xbox 360 will fall below these numbers without any other changes will likely show similar numbers for the PS3 12 months from now as the PS3 is currently selling now. You may be wondering why the sales are so out of proportion with the current sales pattern. It isn't because of a massive short term spike in demand, its more due to how the consoles sell during this period and to whom the majority of people buying consoles are.

Now for the short term with a PS3 price cut. The short term you would expect to see a large initial spike followed by a drop off as the pent up demand for a lower price point is satisfied. This is pretty similar to how a hyped games sales numbers drops over the following weeks, only we're interested in how much additional sales the PS3 gets over those weeks rather than the total sales. Since much of this initial boost is likely to happen outside of the 10 week holiday period it does make the comparison feasable.

In terms of the market the Christmas season is a relatively favourable one for the Xbox 360 always. There are 3 important favourable conditions for the Xbox 360 coming up to christmas. The proportion of sales made up by the Americas rises to over 50% which is their strongest territory. The entry level cost of the Arcade unit becomes the most important price as the sales of the Arcade start to make up proportionally 50-60% of overall sales as people look for cheap gifts and because they feel the pinch due to excessive spending which is inflamed further by the recession making people more fiscally conservative. Lastly the rest of the market which is the core market have pretty much already made up their mind as to which system they want to get and in the United States (which makes up a larger proportion for this period) it is the Xbox 360. Therefore the relative price of the Elite compared to the PS3 is less relevant because that market has decided if they want an Xbox 360 or PS3 already and the people who haven't want the lower entry cost of the Arcade unit.

To wrap it all up!

The Arcade price must drop ~25% world-wide as this is the most important SKU for the undecided masses. The HDD upgrade should also fall to $75-80 which would make another clearly distinct price level @ $225/$229 which is distinctly cheaper than the PS3 (the old Premium). The most important price is the price out the door with the stuff people want. As the Xbox 360 Elite will still give some fantastic margins @ $299 we can look forward to some excellent bundles as we saw in 2007 with the Forza 2, MUA and Viva pack.

Yes yes good for you, figuring out the obvious. Do you feel special?

I agree.

IMO People are putting too much stock into this upcoming PS3 price cut. If it is $100 then what I' about to say could be wrong. People seem to think, if the PS3 was the same price as the Wii (or even the 360 as far as America goes) that it would outsell them. Thats just wrong, they don't grasp the fact that people don't actually want a PS3 as much as a Wii. No matter what the price. Obviously some people are waiting for a cut but ... it isn't going to cause a flood of people that have been waiting, to go buy a PS3. Its been on the market 3 years htis christmas, for the people that really want one they would have bought one over that period.

The reason the 360 price cut did so well was because of Microsoft's marketing and the fact it hit mass market price point. The PS3 is getting nowhere near mass market price anytime soon.

Like you said it comes down to america, price drop or not the best the PS3 can hope to do in that country is tie with the 360.

Though we shall see. Sony don't have the marketing muscle they once had, and that has been a key reason why Microsoft have done so well this gen.

Thanks!

I hope the Xbox Man is reading this.

See, THIS is how you make a stealth trolling "360 will win" thread

Anyway, I agree with your thoughts, and I still stand by my conclusion that the PS3 will win this holiday if the 360 does not have a price cut of any kind, and if it does, then it is possible for the 360 to win, but only in exceptional circumstances- a LARGE price cut. Certainly, there is a Halo game, but it isn't as long as a full Halo, (and it doesn't run in 720p! lol ) and it is the second Halo on the system, which means it cannot hope for the same impact as the first full Gran Turismo in 5 years, and the first on the console or, in Japan, the first Final Fantasy on a current gen console, both of which are PS3 exclusive and are pretty much confirmed for this holiday season.

So it's not the Slim and Pricecut alone that Sony are banking on, it's Slim + Price cut + huge game in Japan + huge game worldwide. Not to mention that a price cut of $50 wouldn't have as much effect as a $100 one (presumably, Microsoft wouldn't cut the Arcade to $99 so early); the most logical price cut for Microsoft, in my opinion, would be a $170 Arcade, $250 Pro and $300 Elite. If they can afford those, of course. And the 360 is already at the so-called "mass market price" of $200, so a cut below that wouldn't have as much effect as a cut going down to it.

But you're usually right about these kind of things, so I don't know! Why must you perplex me so Squilliam ;_;

I think you need to keep in mind though Kantor, that Microsoft are a bunch of loons, I'm starting to wonder if a big fanboy is running Microsoft Xbox HQ

They will do anything to win!

seece said: I think you need to keep in mind though Kantor, that Microsoft are a bunch of loons, I'm starting to wonder if a big fanboy is running Microsoft Xbox HQ They will do anything to win!

Lol, that's Microsoft in general. They try and buy out or destroy their competitors, and if that doesn't work, they lie back for a while, then make a new product and try again.

Examples of their failed attempts to get rid of rivals are the original Xbox (with the PS2), MSN/Windows Live/Bing Search (which all got owned by Google) and Internet Explorer (which is rapidly losing marketshare to Firefox, though Microsoft still have a majority so they're not going to bother with Bing Explorer or IE 360 or whatever )

MSN does pretty well in the UK actually, its all anyone uses.

As a whole I think the Microsoft brand is very strong in the UK! Which makes me happy