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

[TheSource]

 

I think one of the factors at play is how people can rank the consoles in their minds if all three cost the same amount.

You can be:

	1	2	3	4	5	6
1st Choice	Wii	Wii	X360	X360	PS3	PS3
2nd Choice	X360	PS3	PS3	Wii	X360	Wii
3rd Choice	PS3	X360	Wii	PS3	Wii	X360

 

You can get an Xbox 360 for $200-$400, Wii for $250, or PS3 for $400 essentially. But I think its fair to say that alot of people only have a slight preference one way in favor of PS3 or 360. Given that the Xbox 360 is selling for $268 (per Gamasutra) in the USA, scenarios 1-4 are likely the most common, probably to 70-80% of the market. Price drops when PS3 is immediately beneath Xbox 360 will change some minds to PS3 but, when Xbox 360 is beneath PS3 in preference, and gets a price drop it probably changes more minds since it is cheaper already and offers comparable experiences. Wii outsells Xbox 360 2:1 or more in most markets even when 360 is within 10% by average price or cheaper so Xbox 360 price cuts would only switch some people in scenarions 1 and 6 toward Wii because it is sufficiently differentiated.

So...in terms of weighting and how purchasing patterns in the six groups could go:

	30m	25m	20m	15m	10m	5m
	1	2	3	4	5	6
1st Choice	Wii - 60%	Wii - 60%	X360 - 50%	X360 - 50%	PS3 - 45%	PS3 - 45%
2nd Choice	X360 - 30%	PS3 - 30%	PS3 - 35%	Wii - 35%	X360 - 35%	Wii - 35%
3rd Choice	PS3 - 10%	X360 - 10%	Wii - 15%	PS3 - 15%	Wii - 20%	X360 - 20%

Wii	18m	15m	3m	5.25m	2m	1.75m	45m
X360	9m	2.5m	10m	7.5m	3.5m	1m	33.5m
PS3	3m	7.5m	7m	2.25m	4.5m	2.25m	26.5m

Thats very rough, but it would be 45m Wiis, 33.5m 360s, and 26.5m PS3s based on preferences of the six groups. I'd wager Wii will finish a bit higher and the others a bit lower but its not a bad guess off the top of my head.