360 price cuts might be needed to combat "stagnant demand"

[thekitchensink]

Bitmap Frogs said:

dbot said:

Tigawoods said:

 In reality did anyone think that MS would really win against the Ninty and Sony? MS did not have a concrete price cut in America this year. They had a clearance sale which is a limited offer and the model that was reduced  was replaced with the 60gb sku that was priced at 350 but will now be 300. A clearance sale is not a concrete price cut. Now as I said in the previous post the PS3 offers a lot more bang for the buck b/f the 360 price drop. The key point to this is that MS kept their current system prices the way they are now for a very long time versus changing the 360s price as soon as the PS3 dropped 200 dollars. Obviously after 3 years and minimizing hardware costs why wouldnt someone drop the price on your console? With the insane amount of software MS sells as well as possible live fees/downloads im sure they could make up the difference even if they are selling 1 or more of the SKUs at a loss (speculative, we dont know if they are or not).

You may have misunderstood me about a theoretical price drop. I didnt call the 200 hundred dollar price drop desperate even though a lot of ppl interpret it that way. That was a bold move and showed Sony's confidence in the product to sell their hardware at a bigger loss and recoup the losses later in order to get marketshare and more revenue. What I am saying tho, is that if they did cut the price, say in early October or prior to LBP release, it would seem kind of desperate for marketshare since Stringer has alrdy confirmed that they are still selling the PS3 at a loss. I have no doubt that they could make up the losses in due time but doing a price drop now would almost seem like a move to just satiate the fanboys on sites like this in terms of hardware sales.

Sony did not drop the price $200.  I think this has been discussed many times.  They dropped the price of the 60 gig $100 to $500.  They introduced a brand new sku with significant cost savings at $400.  It was a desperate move at the time that has paid off with substainable sales growth.  The MS price cuts in Europe offered some initial sales increases, but have slumped back to pre-cut levels. 

 

 

In other words, they lowered the barrier of entry from 600$ to 400$. That's a price cut.

 

 Exactly.  If someone wanted to get a PS3 before the adjustment, it would have cost $600.  After the adjustment, it was $400.  Call it a rearranging of SKUs, a price cut, whatever you want--the barrier to entry was lowered by 33%.