Danyone seriously believe a PS3 $100 price cut will happen this year?

[NJ5]

Seihyouken said:

NJ5 said:
Another thing... It's very hard to fund a price cut through software sales...

Let's say the PS3 sells 9 million this year without a price cut, and 12 million with a $100 price cut. This means the 3 million userbase gained from the price cut will have to spend around $1 billion in software to compensate for the lost revenue from the hardware side. That's $333 of software per gained user, not counting retailer margins.

Your numbers don't make sense. Do you realize you are insinuating that Sony is going to be losing $333 on every console sold at $299.99. So by your numbers, Sony is currently losing over $233 on every system sold.

I don't even think anyone is acutally dillusional enough to believe that.

That's not what I said, and it's not what I believe.

I'll explain again. By doing a price cut, you're not just increasing sales and taking a loss on those additional sales, you're also getting less money from the customers who would have bought the PS3 without a price cut.

In my example, that number was 9 million (feel free to replace with whatever sales you think PS3 will have this year if no price cut is done). With a price cut, these 9 million will still buy the PS3, but each of them will give $100 less money to Sony. Resulting in a total of almost $1 billion, which is the money lost on hardware sales to those users. The 3 million who buy the PS3 because of the price cut have to make up for that loss, to the tune of $333 each in this scenario. I'm not even counting the losses on those 3 million consoles here since I don't know the manufacturing price...

That's how a cost/benefit analysis is done (although a rough one). You have to look at the two scenarios, with and without the price cut and see how much money is lost or gained in total. The additional users have to pay for the cost of the whole price cut, not just the cut on the consoles they buy.