| HappySqurriel said: There are only three factors that determine whether a price cut makes sense for a console:
Now, if a console is breaking even before the price reduction you require a 25% boost in sales to justify a $50 price reduction, or a 50% boost in sales to justify a $100 price reduction, if you're willing to accept a $200 loss for each console sale that you gained. |
Doesn't make much sense to me. The real point is: how many games/blu-ray discs/controllers and other hardware will each console move and how much profit will the console maker make on these things. If the average console sold to the public on a specific price point (as you can imagine hardcore gamers will probably buy the console on a higher price point and will probably buy more games/blu-ray discs/controllers and other hardware) brings in more profit for software/hardware than lost profits due to the lower price point, then the price cut is justified. Offcourse, this is simplified because in real life other benefits can be gained from selling more consoles (think for example of lower costs of parts for the console because of the better negiotiating position of the console maker).
