EDIT: THIS IS FOR US ONLY
(1) 11/11/06 - 07/07/07 - 1,610,118 - $599 60gb - $499 20gb
(2) 07/07/07 - 03/11/07 - 673,614 - $499 80gb - $399 40gb
(3) 03/11/07 - 27/09/08 - 3,748,395 - $499 80gb - $399 40gb
Assumed average price per PS3 sale in each time period:
(1) $599 & $499 | Assumed Average = $575
(2) $499 & $399 | Assumed Average = $475
(3) $499 & $399 | Assumed Average = $450
Total number of weeks in each time period:
(1) 11/11/06 - 07/07/07 | No. Weeks = 34
(2) 07/07/07 - 03/11/07 | No. Weeks = 17
(3) 03/11/07 - 27/09/08 | No. Weeks = 47
Average sales per week:
(1) 1,610,118/34 = 47,356
(2) 673,614/17 = 39,624
(3) 3,748,395/47 = 79,753
n.b - Period 2 seems exceptionally low but it is the only time period which doesn't include a Christmas, and period 1 contains the launch date.
Assumed average price * average sales = Assumed average revenue per week:
(1) $575 * 47,356 = $27,229,700
(2) $475 * 39,624 = $18,821,400
(3) $450 * 79,753 = $35,888,850
Calculating % assumed price drop:
(1)-(2) (100/575) * 100 = 17%
(2)-(3) (25/475) * 100 = 5%
Calculating % average weekly sales difference
(1)-(2) (-7,732/47,356) * 100 = -16%
(2)-(3) (40,129/39,624) * 100 = 101%
Putting results into table:
Price % Sales %
$575 100 47,356 100
$475 83 39,624 84
$450 78 79,753 185
Calculating relationship between price and demand:
Total assumed price drop: $125 | -22%
Total demand increase: 32,397 | +85%
Everytime the price drops 22%, the demand increases 85%
Everytime the price drops 2.2%, the demand increases 8.5%
Everytime the price drops 0.22% the demand increases 0.85%
(Apply 4.54 multipler to roughly get 1% price drop)
Everytime the price drops 1% the demand increases 3.859%
Applying this information to our table:
Price % Sales %
$575 100 47,356 100
$475 83 39,624 84
$450 78 79,753 185
70 215
60 253
50 291
40 329
30 367
20 405
10 443
Calculating relationship between price and percentage:
$575/100 = $5.75
1% = $5.75
Applying this information to our table:
Price % Sales %
$575 100 47,356 100
$475 83 39,624 84
$450 78 79,753 185
$402 70 215
$345 60 253
$287 50 291
$230 40 329
$172 30 367
$115 20 405
$57 10 443
Calculating relationship between deman and percentage:
47,356/100 = 473.56
1% = 474
Applying this informationg to our table:
Price % Sales %
$575 100 47,356 100
$475 83 39,624 84
$450 78 79,753 185
$402 70 101,910 215
$345 60 119,922 253
$287 50 137,934 291
$230 40 155,946 329
$172 30 173,958 367
$115 20 191,970 405
$57 10 209,982 443
Applying total revenue to our table:
Price % Sales % Total revenue:
$575 100 47,356 100 $27,229,700
$475 83 39,624 84 $18,821,400
$450 78 79,753 185 $35,888,850
$402 70 101,910 215 $40,967,820
$345 60 119,922 253 $41,373,090
$287 50 137,934 291 $39,587,058
$230 40 155,946 329 $35,869,580
$172 30 173,958 367 $29,920,776
$115 20 191,970 405 $22,076,550
$57 10 209,982 443 $11,968,974
This shows that with the current situation (competing and complimentary products prices staying the same, same advertising amount, same amount of competing/complimentary products, same quality of competing/complimentary products. Same everything!), Sony would want to sell the PS3 at $345 to achieve maximum possible revenue from hardware alone. This does not take profitability into account.
EDIT: THIS IS FOR US ONLY
