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Forums - Gaming Discussion - Do you people see the sale shifts?

theprof00 on 30 November 2009
r505Matt said:

Well, first, I don't think having the attitude to push a competitor out of the way is necessary for there to be a price war. Whoever cuts their prices first or second is irrelevant. If M$ didn't cut their price, or if Sony didn't cut the price in the first place (and then M$ did), that would be different, but since they both cut their price, regardless of the reason, they're still competiting through price.

Yes the reason is important. I'm going to try and give a simplified example to illustrate. If I make a one-of-a-kind item and sell it at one price, and then drop it down to another price, who am I competing with? Nobody, because I'm not. I'm trying to get more people to buy my product because there comes a time when the more people have my product, the more I make. According to the idea of demand, as product recognition and brand grows, more people will buy the product now then at launch, because a lot of people are simply unaware and could not buy it at any price. This is the fundamental concept I am trying to explain. This is the "fine line" I was talking about.

Though I will concede that MS most surely did it completely in response to Sony's price cut. In otherwords, I wouldn't be surprised if they'd talked about it months in advance and said "let's just wait until Sony cuts the price on the PS3".

I think your 3rd paragraph doesn't matter. Comparing the success of the competitor-free PS2 to the current situation is just silly.

I'm not comparing the success, I'm describing the environment. For example, if a competitor suddenly appeared 3 years after I made my product, not only would they have to deal with being where I was at launch (with only 1 out of 50 people knowing my brand and product), but they have to additionally overcome an environment in which people swear by my product. So, for them, it's not just 1 out of 50, it's 1 out of 100 due to circumstances. 1 in 50 know about it, but there are 40 people saying, "I am very happy with my _________, theprof00's company did me a great service"

Also, M$ isn't at a loss with their system.

Yes they are, they've lost billions growing the brand

If they really needed to push Sony out of the way, they would be selling elites are 200-250 by now.

They don't need to sell elite for 200-250. They have the arcade for that. I didn't address the first post I made to you, so you probably didn't read it, but as I said earlier, the problem with Sony sales was that people didn't yet find value with its components. MS, realizing this, and having plenty of removable and recoverable components, like exclusive HDD, capitalized on this by offering a barebones system. This in turn both challenges the price of their own, and their competitor's consoles. However, Xbox fans will still go with the Elite because they want the best. The idea is to get people saying "why should I buy PS3 when I don't need a BR player or a harddrive, like on xbox".

BUt that's unnecessary, Microsoft, as a brand, is a more recognizable name than Sony, even if not in the gaming market.

Not in the gaming market, but now they are.

If you live in the US and don't know about Sony, then your uninformed. If you live in the US and you don't know about M$, then you may be a hermit. Nothing wrong with that, but at least in the States, Microsoft has a strong enough name that they hardly need to take losses to get anywhere. And they aren't taking losses, they've been reporting profit (enough to cover the RRoD fiasco too).

I'm sorry, but MS is in the whole by a lot. They've been reporting profit, but not overall profit. They are still in the hole several billion (I think 5-6B) and have only made (I forget the number and am too lazy to look it up) about 800M$, if that. Brand isn't everything. You can't just expect to make money from your brand, and just being widely known doesn't mean your brand is connected to anything good. In fact, it will be interesting to see how sales go for MS after this gen. RROD is starting to become a more mainstream gaming concern. MS really really hurt their brand this gen.

PS: When I'm talking about their "brands" I'm talking about xbox and playstation. While MS hurt the XBox brand this gen, it did little to affect the MS brand.

 

 



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r505Matt on 30 November 2009

 

 

dbot said:
DirtyP2002 said:
Euphoria14 said:
DirtyP2002 said:
Euphoria14 said:
That is 125k in ONLY 1 region. You seem to forget that Japan + Others exist as well. We may see a 200-250k week here.

360 has NEVER lost a Black Friday to the PS3. It is an accomplishment whether you wish to belittle it or not.

I heard Milo was just a scripted demo.

Sony is also set to be profitable next year on just the PS3. It has already been stated that the Playstation family as a whole is profitable,

Also, show me a link that shows the 360 Arcade is profitable.


Last gen Sony outsold MS by 120 million. Now we have a 6-7 million lead for MS. MS wouldn't be worried about getting outsold by 10 million. You are still judging from a micro-perspective. There is no way, absolutely no way that Sony won't be the big loser this gen. Nintendo is the big winner and MS did well. Look where they came from and where they are now.

After you did so, check financial reports for the divisions. THEN tell me who should be worried about a 200k difference?

Japan is a very different market and nobody expected MS to even sell a million there but they did. Actually everybody expected Sony to dominate like they did with the PS2 but they failed.

Okay, so the PS3 "won" a black friday (excluding Nintendo). That was the black friday 2 months after a MAJOR pricecut and a redesing / relaunch of their console.

Milo was not a scripted demo, there were people playing with it. Check eurogamer or this video

http://www.youtube.com/watch?v=caceIkKKR68

And Sony said they would be profitable in 2009 as well. This means nothing to be honest. Maybe they make a small profit, but this is nowhere near the losses they made for 3 years (4 if you count R&D) in a row with the PS3.

And you know companies don't publish their numbers for single SKUs but I can show you the financial results for the EDD being positive even though there is the Zune HD making losses.

That's it, just keep belittling an accomplishment. It must be real hard for you to admit a sales shift without going off topic and attacking Sony financials.

Also, this is where I got the info on the scripted demo. I believe Kotaku and Eurogamer mention it.

http://www.vgchartz.com/forum/thread.php?id=75672&page=1

 

As for your Sony losses comment. I guess the couple of profitable quarters for MS have made up the 6Billion they lost in their XBox division right?

Of course their small profit matters though right?

financial reports are offtopic now?

There never was a 6 billion loss for the Xbox. Actually the losses of the PS3 are higher than the losses of the Xbox. And this is not even this gen. Besides that, MS used this money for building up the Xbox brand and Xbox Live. Sony lost money and destroyed some of the great reputation the Playstation brand had. That is something.

I applaud Sony for selling more than X 360, but this is a MINOR success of the major failure named PS3 (in comprehension to last gen and financially - NOT for gamers)

The EDD (Xbox 360) has loss 3.79 billion dollars since 2005.  I wouldn't consider this a huge success for Microsoft.

link: http://www.microsoft.com/investor

Didn't realize it was that much, do you have direct links to that?



dbot on 30 November 2009
r505Matt said:

 

dbot said:

The EDD (Xbox 360) has loss 3.79 billion dollars since 2005.  I wouldn't consider this a huge success for Microsoft.

link: http://www.microsoft.com/investor

Didn't realize it was that much, do you have direct links to that?

http://www.microsoft.com/msft/reports/default.mspx  

You will need to download the 2009, 2008, and 2007 10-k(s).  They break out the EDD data by year.  Some of the 2008 data was adjusted in the 2009 report so the more accurate loss is (3.72) billion dollars.



Thanks for the input, Jeff.

 

 

r505Matt on 30 November 2009
theprof00 said:
r505Matt said:

Well, first, I don't think having the attitude to push a competitor out of the way is necessary for there to be a price war. Whoever cuts their prices first or second is irrelevant. If M$ didn't cut their price, or if Sony didn't cut the price in the first place (and then M$ did), that would be different, but since they both cut their price, regardless of the reason, they're still competiting through price.

Yes the reason is important. I'm going to try and give a simplified example to illustrate. If I make a one-of-a-kind item and sell it at one price, and then drop it down to another price, who am I competing with? Nobody, because I'm not. I'm trying to get more people to buy my product because there comes a time when the more people have my product, the more I make. According to the idea of demand, as product recognition and brand grows, more people will buy the product now then at launch, because a lot of people are simply unaware and could not buy it at any price. This is the fundamental concept I am trying to explain. This is the "fine line" I was talking about.

Though I will concede that MS most surely did it completely in response to Sony's price cut. In otherwords, I wouldn't be surprised if they'd talked about it months in advance and said "let's just wait until Sony cuts the price on the PS3".

I think your 3rd paragraph doesn't matter. Comparing the success of the competitor-free PS2 to the current situation is just silly.

I'm not comparing the success, I'm describing the environment. For example, if a competitor suddenly appeared 3 years after I made my product, not only would they have to deal with being where I was at launch (with only 1 out of 50 people knowing my brand and product), but they have to additionally overcome an environment in which people swear by my product. So, for them, it's not just 1 out of 50, it's 1 out of 100 due to circumstances. 1 in 50 know about it, but there are 40 people saying, "I am very happy with my _________, theprof00's company did me a great service"

Also, M$ isn't at a loss with their system.

Yes they are, they've lost billions growing the brand

If they really needed to push Sony out of the way, they would be selling elites are 200-250 by now.

They don't need to sell elite for 200-250. They have the arcade for that. I didn't address the first post I made to you, so you probably didn't read it, but as I said earlier, the problem with Sony sales was that people didn't yet find value with its components. MS, realizing this, and having plenty of removable and recoverable components, like exclusive HDD, capitalized on this by offering a barebones system. This in turn both challenges the price of their own, and their competitor's consoles. However, Xbox fans will still go with the Elite because they want the best. The idea is to get people saying "why should I buy PS3 when I don't need a BR player or a harddrive, like on xbox".

BUt that's unnecessary, Microsoft, as a brand, is a more recognizable name than Sony, even if not in the gaming market.

Not in the gaming market, but now they are.

If you live in the US and don't know about Sony, then your uninformed. If you live in the US and you don't know about M$, then you may be a hermit. Nothing wrong with that, but at least in the States, Microsoft has a strong enough name that they hardly need to take losses to get anywhere. And they aren't taking losses, they've been reporting profit (enough to cover the RRoD fiasco too).

I'm sorry, but MS is in the whole by a lot. They've been reporting profit, but not overall profit. They are still in the hole several billion (I think 5-6B) and have only made (I forget the number and am too lazy to look it up) about 800M$, if that. Brand isn't everything. You can't just expect to make money from your brand, and just being widely known doesn't mean your brand is connected to anything good. In fact, it will be interesting to see how sales go for MS after this gen. RROD is starting to become a more mainstream gaming concern. MS really really hurt their brand this gen.

PS: When I'm talking about their "brands" I'm talking about xbox and playstation. While MS hurt the XBox brand this gen, it did little to affect the MS brand.

 

 

First off, the blue is painful -.-

Second, been doing some research, I thought M$ had broken out of the negative, but that was wrong. At the end of Fiscal 08, they were at about 2.6 billion loss, not including RRoD, so now it's more around 3 billion loss (including the profits they've posted so far this fiscal term). Now, obviously, those numbers include much much more than just the xbox, so who knows.

When I was talking about brand recognition I was referring to directly outside the gaming market.

The point about PS2 was that if it had any serious competition, it most likely would not have been as successful. Well maybe, and that's the issue, and that's why you can't really compare different generations of consoles.

And to the first part (yes I went in reverse order), your logic works, IF xbox360 and wii didn't exist, but because PS3 DOES have competition, it doesn't really apply here. And to say the PS3 is a one-of-a-kind item is silly, then the Wii is one-of-a-kind (for now) with motion controls, and xbox is one-of-a-kind for, say, streaming 1080p instantly. I'm not saying you think that, but its somewhat implied so I'm responding to it upfront.

So since PS3 is competiting with 360 and Wii, it changes the context. Dropping a price when you have no competition to increase consumer penetration, versus dropping a price when you have stiff competition to increase penetration; they are VERY different. So, while I completely understand and agree with the logic in your point, I do not think it fits here.

 

I think the funny part is that I'm not sure I care about any of this, but it is fun to talk about I suppose haha.



r505Matt on 30 November 2009
dbot said:
r505Matt said:

 

dbot said:

The EDD (Xbox 360) has loss 3.79 billion dollars since 2005.  I wouldn't consider this a huge success for Microsoft.

link: http://www.microsoft.com/investor

Didn't realize it was that much, do you have direct links to that?

http://www.microsoft.com/msft/reports/default.mspx  

You will need to download the 2009, 2008, and 2007 10-k(s).  They break out the EDD data by year.  Some of the 2008 data was adjusted in the 2009 report so the more accurate loss is (3.72) billion dollars.

Yeah, I actually found it right after I posted but thanks, though my numbers came out differently? I took like 5 seconds to calculate though so I'm not surprised.

 

Edit: Yeah, re-did some of the math, comes to about 2.6 minus RRoD Warranty coverage, and that was abotu 1 billion predicted loss? or a little more? 3.6-4? But how much of that is Xbox? Has anyone tried to figure it out?



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Uberkiffer on 30 November 2009

Quite honestly, the xbox moves software and accessories at a crazy pace. I really don't see much of a "shift" in sales, even with the ps3 finally consistently outselling hardware over the 360. 360 always has had a much higher attach rate, sells tons of add-ons, and keeps growing its pay-to-play online service. 360's attach rate keeps going up, more users keep buying additional controllers, chat pads, wireless headsets, and new HDDs - this will not change anytime soon. As a result, the video-game division of MS has made good strides toward consistent profibility. As a publicly held company there is no issues with stockholders over the division - it's here to stay at least for another generation.

PS3 on the otherhand is in the position where they need to sell more consoles and take a larger financial hit so that they can begin to reap the rewards of peripherals and increased third-party sales. They are even looking into a pay-to-play online system as well. As is, I see no way at all that the PS3 will drop its price yet another year in a row, especially once it finally starts to show some positive signs of life. The risk they took with blu-ray and the cell processor both in the same generation was huge, they have yet to see a single cent of profibility from this venture. Couple that with a free-online service and they start using their own systems to build server farms - this costs even more (initial + monthly). Needless to say, they put all their eggs into one basket and it has yet to be fruitful for them. I doubt that they would ignore the next iteration of consoles, but if the ps4 struggles as much early on as the ps3 did, I think it is entirely within the realm that ps4 would be a "sink-or-swim" scenario for the division.



r505Matt on 30 November 2009
CGI-Quality said:
Uberkiffer said:
Quite honestly, the xbox moves software and accessories at a crazy pace. I really don't see much of a "shift" in sales, even with the ps3 finally consistently outselling hardware over the 360. 360 always has had a much higher attach rate, sells tons of add-ons, and keeps growing its pay-to-play online service. 360's attach rate keeps going up, more users keep buying additional controllers, chat pads, wireless headsets, and new HDDs - this will not change anytime soon. As a result, the video-game division of MS has made good strides toward consistent profibility. As a publicly held company there is no issues with stockholders over the division - it's here to stay at least for another generation.

PS3 on the otherhand is in the position where they need to sell more consoles and take a larger financial hit so that they can begin to reap the rewards of peripherals and increased third-party sales. They are even looking into a pay-to-play online system as well. As is, I see no way at all that the PS3 will drop its price yet another year in a row, especially once it finally starts to show some positive signs of life. The risk they took with blu-ray and the cell processor both in the same generation was huge, they have yet to see a single cent of profibility from this venture. Couple that with a free-online service and they start using their own systems to build server farms - this costs even more (initial + monthly). Needless to say, they put all their eggs into one basket and it has yet to be fruitful for them. I doubt that they would ignore the next iteration of consoles, but if the ps4 struggles as much early on as the ps3 did, I think it is entirely within the realm that ps4 would be a "sink-or-swim" scenario for the division.

False.

Regarding the PS4, the MAIN issue for Sony at launch with the PS3 was price. A launch PS4 @ $299 would be a different scenario entirely.

Sony has stated they plan to introduce other subscription-based features to PSN, but the current model would remain free, there would just be other things one can subscribe to. As to what, who knows.

Edit: Figured I'd post the quote and a link

“Especially in the online area, we are studying the possibility of introducing a subscription model, offering premium content and services, in addition to the current free services."

http://www.edge-online.com/news/sony-may-introduce-psn-subscription-model



dbot on 30 November 2009
r505Matt said:
dbot said:

Yeah, I actually found it right after I posted but thanks, though my numbers came out differently? I took like 5 seconds to calculate though so I'm not surprised.

 

Edit: Yeah, re-did some of the math, comes to about 2.6 minus RRoD Warranty coverage, and that was abotu 1 billion predicted loss? or a little more? 3.6-4? But how much of that is Xbox? Has anyone tried to figure it out?

 

EDD Performance

2005 2006 2007 2008 2009 Total
 $         (485,000,000)  $(1,339,000,000)  $(1,898,000,000)  $     497  $     169  $(3,721,999,334)

These were the numbers I got from the 10-k's.  Are they different than yours?  Why are you adjusting for RRoD coverage?

 



Thanks for the input, Jeff.

 

 

r505Matt on 30 November 2009
dbot said:

 

EDD Performance

2005 2006 2007 2008 2009 Total
 $         (485,000,000)  $(1,339,000,000)  $(1,898,000,000)  $     497  $     169  $(3,721,999,334)

These were the numbers I got from the 10-k's.  Are they different than yours?  Why are you adjusting for RRoD coverage?

 

Why would you include 2005? Fiscal 2005 ended september 30th 2005, 360 was released in November, and in the discussions and analysis section of the 2006 report, it mentions the 360 development costs there. I don't think they reported any 360 costs before fiscal 2006. Even if you put that together, it comes to 3 billion, you know 2008 and 2009s are positive right? They reported profit.

And I thought it didn't include anything about the warranty since I couldn't find anything about it. Doesn't mean it isn't already in there though.

Though now that I think about it, it's not like they would need to report the loss ahead of time, so I guess it didn't make any sense. So EDD is at 3.056 billion loss since 360's release. 2.571 if you don't include fiscal 2005.

@CGI-Quality, probably -.-



atma998 on 30 November 2009
darthdevidem01 said:
Avinash_Tyagi said:
rocketpig said:
FonzGemini said:
Next year the PS3 development cost wil drop so if MS has a price drop guess who will put their fire out before it even starts?.... That would be Sony. They will also follow up with their own price drop.

The problem is that MS is making money while Sony is losing it. Who do you think has more flexibility to drop the price under that situation?

FYI, any drops in manufacturing costs made by Sony can be matched by Microsoft. Sony doesn't hold the patent on reducing die size and shrinking processes. They may be able to slice a few more dollars off cost because of the BD drive (versus the already saturated production costs of DVD) but that won't make enough of a difference to matter.

Yeah I don't think people realize that Sony is in very deep financial problems, they don't even expect to be profitable as a company until 2013, and that's only if 3D tvs become a hit and PS3 becomes profitable, so Sony price cutting to match the 360 would be a bad idea for them

& to soleron:

bla bla bla

back to routine I see:

One side -- "ZOMG PS3 outsold xbox 360.....it will outsell it within a year"....check the numbers people

Other side -- "PS3 is a money looser, SONY WILL close if it doesn't make profit, SONY will close if they drop price again"

in fact a few users on here & I think NJ5 even made a thread earlier in this year saying "if SONY drop PS3 to $299 they may go bankrupt"

Well....we know how that turned out!

Face it Avinash, SONY isn't stupid, they aren't going to do anything that will make them bankrupt, people at SONY know whats going on inside more than YOU

If you think SONY will abandon the second most powerful brand in videogames because of the PS3, you are mistaken

fixed.

But seriously darth, this isnt about being stupid or not, there are a lot of companies going bankrupt by making wrong decisions.