Price cut - When/How Much

[catofellow]

robjoh said: I think you miss some key feuters in a price cut. 1, If microsoft did a price drop today it would disapere in media or be seen as a sign of failure. The xbox360 is doing fine for the moment it has started to sell some in japan, of the next-gen machins it is leading in USA and Europe. In USA it is outstanding.

I do not understand this rationale that lower prices imply inferior products.

2, Sony do not have the room for a price cut, the ps3 is simple to expensiv. I do not think it need one either. Sure it is a expensive kit but with the production problems they have and that en EU launch is first in mars I do not see the big problem, and most of all their old cash cow ps2 is still selling wery well. Here in Sweden it outsold both the Xbox360 and Wii with an order of three to one the week before christmas. Sony will most probarbly use the ps2 as there "party" machin for at least one more year. A price drop now is unnecessary because the ps2 is going so well, thank Guitarr hero, buzz and singstar for that.

Remember that Sony is supplying the optical drive, and possibly many other parts to the machine. It will be able to cut prices faster than its competetitors.

3, Nintendo has absolut no need for a price cut now. They are selling everything they can produce. And if we should be honest they only have three good games: Wii sport Zelda and Red Steel. Mayby Wario but it isn't a systme seller. How many Nintendo fans do you think will jump over to Wii when Metroid, Super Mario Galaxy and most of all SSMB is coming out. In Japan, Wii will probarbly be selling out simple because people that want a DS will by a Wii also. Here in Sweden there is so many pre-booked system now that some internet stores are talking about 2-3 months of delivery time. Nintendo has stated that their goal of delivering is what the can produce. So I don't see that they need a price cut yet. Actulay some stores is selling the Wii for more than the Xbox360 now.

Nintendo's will have an ample supply of consoles come May.. They have launched worldwide and will lose credibility especially if Microsoft undercuts their price. Once Microsoft and Nintendo cut their resprective prices, sony will be compelled to cut prices as well.

Summing it up I would say that neither of the companies need a price cut. Microsoft is selling well in both USA and EU, is now starting to sell some consols in Japan. Nintendo and Sony can't delivere anyway so why should they care? And as a final point here in Sweden is the Xbox360 premium already costing half of the sony ps3 launch price (3200 SEK against 6300 SEK, 7 SEK ~ 1 USD). A price drop wouldn't change a thing

This is not OPEC. Each console manufacturer knows that if they cut the price of their consoles, sales would go up. That is the goal by the way. The belief that technology somehow works opposite to the rest of the capitalist system (its price is high, therefore it must be the best! i wanna buy!) is insane. I submit to you that Turbo Grafix 16 won the 16 bit generation using this rationale. Using this logic also makes you wonder why anyone bothered to cut prices last generation, nearly every year in Sony's case.