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TRios_Zen on 03 September 2008
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Million said:
TRios_Zen said:
Million said:

How could Sony's price cut be a move of desperation ?

The PS3 was cut to a price where many of the people who wanted PS3's were able to buy PS3's , the XBOX 360 was cut to a price where people who were maybe unsure about which console they wanted , wanted to buy PS3's , had no interest in HD consoles could adopt a HD console for a minimal cost.

Sony had the higher price point and it wasn't reduced purely because the consumer didn't see it as good value for money but because it's far more than what the average customer can afford.

The XBOX 360 is already within what many people can afford for a console but there obviously isn't alot of interest in the XbOX 360 relative to it's competition ,if it is selling worst than it's already more expensive competitor.This isn't neccaserily a mvoe of desperation ( giving away 360's for free would be desperation ).

Your assumption: "The PS3 was cut to a price where many of the people who wanted PS3's were able to buy PS3's , the XBOX 360 was cut to a price where people who were maybe unsure about which console they wanted , wanted to buy PS3's , had no interest in HD consoles could adopt a HD console for a minimal cost." is flawed by your personal preference.

In other words you are saying, there is ONLY demand for the PS3, that could not be realized until a price cut.  While the ONLY demand for the 360, is as a cheaper alternative to the PS3. 

I wonder, do you actually believe that?

 

No I just couldn't be bothered to fully elaborate my opinion , in both cases the biggest influence on sales is price however demand is not neccaserily dependant on price ( e.g a $50,000 Ferrari is high in demand but will not sell a whole lot at that particular price point) it's only when the price is at an affordable point that the demand for the console will = sales. in the case of the 360 the restriction the price point puts on the actual sales is far less than that of the PS3.

Price point is like hurdles , the more you put infront of the end line the less people are likely to cross it without alot of determination . More people are getting to the end line on the PS3 track despite there being more hurdles than the 360 track,if we remove more hurdles on the PS3 race track we're likely to get even more people finishing the race because the difficulty of the PS3 race track ( or the price point) is greater than what the average human is capable of.

I believe the potential demand for the PS3 is greater than that of the 360 ( historical sales statistics proove my belief , the PS3 sells better than  the 360 at a higher price point basic economics argues that the PS3 must experience greater demand) . Therfore the price of the PS3 must be a bigger factor of it's demand than the 360 , if less people want a 360 than want a PS3 then a $50 price cut won't have as substantial an effect on the PS3 as it will the 360.


We also have to consider affordbility as a $50 price cut will still keep the PS3 out of what many can afford ( yet it still outsells the PS3) , the 360 is already nearing an affordable price yet it is outsold by it's more expensive competitor . A move into affordability will also have a bigger impact on the PS3 than it will the 360.

 

Ahhh, economics.  I'm a few years out of my last degree, but I will acknowledge that there is genuine thought put into this argument.  I even like your hurdle comparison.  I feared from the post that I replied to that you simply truly had Sony colored glasses on.  I still would guess you strongly favor the Sony brand but there isn't anything wrong with that.

I'll say this though: I don't disagree with you on the demand for the PS3, and I totally agree that if they were at equal price points the PS3 would sell more.  The problem with this logic, is that Sony chose to front load the price (including Blu-Ray and Wi-Fi) while Microsoft chose to reduce the cost of it's box by leaving those out and selling them (at exorbirant prices I might add) after market so to speak. These business plans have led to the higher cost of the PS3 in comparison to the 360; thier choice.  Obviously then if the price was reduced to 360 levels it WOULD be a better value...Hi-Def Disc player and Wi-Fi for the same price...pretty straight forward there...

However I think the 360 can and will be competitive throughout this generation however and if they finish 3rd, but are making a profit on thier business model and software sales, the ONLY thing that 3rd place finish would accomplish would be to make some folks, feel better/worse about thier purchase on message boards...nothing else.  AND if MS improves thier market share, vis-a-vis last generation, they will consider this a SUCCESS, 3rd place or no.

For the record, I don't own a PS3...yet.  Owned every major console since the NES/SEGA era.  I see no reason to change now.