M$ making good money

[czecherychestnut]

selnor said:

czecherychestnut said:

Anyone saying there are loosing money again ??

 

There is no evidence to say that the price cut puts M$ in the red with their skus. All 3 Skus are privvy to the new hardware overhaul, which significantly cuts costs of production. I would say they are either even or in the black. This price cut was planned, not forced. The 360 is nearly 3 years old and is in line with price cuts of the PS2. You cant tell me that Sony needed to price cut the PS2 3 years in. It was a planned decision of which they would only do for profit.

The other way of saying it is that there is no evidence to say that hardware changes have reduced cost enough to counter the decrease in unit price.The only evidence we have is from their last earnings report in July, so its pure speculation on both our parts. But consider that unless the changes in hardware have resulted in a greater reduction in the cost per console than the reduction in unit price, then profit per console will decrease, and it'll be up to increased sales to overcome that reduction. And for that we need to wait and see the longer term impact of the price cut, but with this weeks sales being around 25% higher than what Xbox was selling before the price cuts, it'll be interesting to see at what level they plateau. I'd hazard a guess that MS were probably hoping for better than that, but Christmas will be the decider as to whether the planned move pays off.