Sony : sales of PSP and PS3 to rize 10-15% this year

[Squilliam]

HappySqurriel said:

Squilliam said:

HappySqurriel said:

Well, year over year PS3 sales seem to be down about 10% in 2009 and it doesn't have the benefit of having Grand Theft Auto 4 and Metal Gear Solid 4 being released later this year ...

About the only way I could se their estimate comming true is if they reduced the price by $100 fairly early in the year and had some unannounced big games to release this year.

An early price cut would almos certainly net a higher overall revenue as the elasticity is higher as the price approaches the ideal for maximising volume. Therefore an early price cut of that magnitude would have larger effects.

 

 

Which is exactly the reason it has to be a fairly early price reduction if they are going to make this target ...

A sales boost from (pretty much) anything tends to have a very large initial effect followed by a dramatically smaller effect over time. If the price reduction happens relatively soon, the PS3 could recover its "lost" sales from the initial boost and would only need to maintain a sales rate of 10% over 2008 to make their target ... If the sales boost happens much later in the year there is no way that the initial boost will recover the "lost" sales this year, and the sustained sales would have to be dramatically higher than is possible for Sony to meet their target.

If the price is cut by 25% then one would expect sales to increase by more than 25% over the long run compared to present levels as the price approaches an 'ideal' level alongside the large short run increase in sales. The PS3 is in demand and its elasticity in the long run will be greater than 1 which means overall revenue will increase with a price cut.