Xbox 360 is at a Mass Market Price -- But Are YOY Sales INCREASES enough?

[PalmiNio]

Squilliam said:

PalmiNio said:

Squilliam said:
Darth:

Microsofts real problem is not their performance relative to the PS3/Wii, their problems stem from the relative performance of the SKUs.

The Arcade is just too good, and the upgrade kit is too enticing. The Arcade is stealing sales of the Xbox 360 Premium and thats lowering total revenue/profitability. Their issue is making the Premium/Elite SKUs more relevant and therefore increase their revenue from hardware and ensure a greater adoption of SKUs with HDDs as their online revenue is a substantial part of their business.

 

Do you have facts to support that? Do you know the breakdown numbers of the diffrent SKUs?

Can only talk for the 2 biggest electric chains in sweden and looking at the sales number the 60gb Pro/Premium version sold more over christmas and new years the arcade. Some stores doesn't even have Arcade on the shelves.

In MS case you allways have to look at the competition. Sure Wii is unfair in one way but that's the best finanscial position nad MS don't have it. But on the other hand Sony is doing worse with PS3 and the high price is not an argument for lower sales.

If the fact was that Sony more then twice as much money as MS on every PS3 compared to 360 then it would be good for Sony and bad for MS but as long as they make less money per console and sell less then MS has the upper hand. The price of a product can't be drawn to sales, half the price never means double the sales. The important thing is to make money and since 360 is creating more money then PS3 the winner is clear. And looking at Wii the case is even more clear.

This is from memory:

1. The average sales price has dropped to ~$270

2. Reports of the Arcade SKU making up 50% of the total sales, whereas before it made up a far smaller % and the Premium was dominant.

Also its supported by economic theory, price elasticity (Ratio of change in demand due to price changes) is greatest within the Xbox 360 product group (Arcade, Premium, Elite) than the cross price elasticity between the PS3 and Xbox 360. Which means more people will buy an Arcade due to it being cheaper/better value than will be swayed from buying a PS3 into buying an Xbox 360.

 

Well first of all, you don't know the price elasticity on video console. You may know the theory of it but in that case you should know that lower price is not equal to the same rise in sales. To meassure the elasticity between 2 different products like 360 vs PS3 is not the same as within the same product. The elasticity is much higher between Pro and Elite then between Pro and Arcade and thus we can belive that the change in price doesn't effect the ratio between Pro and Arcade that great.

I know that Arcade did top around 50% but that was when it took over after Core. The good price with wireless controller and memorycard created a great rise. But with the new 60gb model and the low difference in price I belive that the Pro model is on top again and that it offers most 360 for the bucks and that most consumers find that this model has most value.

I suppose it's also diffrent from region to region. Is the difference still 199 vs 299 in the US? In Sweden it's 1800 vs 2500 which is about 80 dollars in difference.