By using this site, you agree to our Privacy Policy and our Terms of Use. Close
Smashchu2 on 23 May 2009
Edit Thread
Squilliam said:
Smashchu2 said:
Squilliam said:
Smashchu2 said:
greenmedic88 said:
Smashchu2 said:
@greenmedic88: uhhh, where to start
1)The PS3 will not match the PS1 or 2 in any way. Those systems turned a profit and sold over 100million units. The PS3 is struggling to beat the N64. This claim is just plain silly.
2)"Replacement by 2010? No. Announced in 2010? No." How? This isn't an answer.
3)
"But SCE can't afford to lose money on a price drop." Production cost drops are specifically to address this issue, not to simply repackage a previous product in an attempt to extend longevity. Lower production costs, fewer components, overall reduction in size and weight equates to smaller, lighter packaging, reduction in shelf/storage space for inventory, etc. All have the same effect of reducing overall cost to deliver product to the hands of the end consumer.

Good point, but you didn't address the systems stand in the market (no one is). The system is behind and isn't growing. Your claim would only work is the system has more units sold then it actually does.

@txrattlesnake: How you came to that conclusion I will never know. You claim the 360 will be the one to get the boot when it sells less then the PS3, has more million sellers, and is in demand more for consumers. The PS3 is also costing the company an arm and a leg (the 360 was never meant to make money). Look here

http://vgchartz.com/hwcomps.php?cons1=Wii®1=All&cons2=PS3®2=All&cons3=X360®3=All&start=39453&end=39950&weekly=1

Your claims are crazy. The Wii is growing faster then the other two. The PS3 and 360 are growing at the same rate despite the fact the 360 has been out longer. The Wii, from January to May, is doing worse then last year, but coupled with that fact that in 08 it has Brawl, Mario Kart and Wii Fit, and this year, Punch Out, it's doing really well.

Your claims just don't match up with the facts.

Nobody has been claiming the PS3 will move the same number of units as the PS2 or even the PS1 life time sales. That wasn't even the OP which was more along the lines of the PS3 will be out of production within what, a year or two?

As for the claims of seeing a PS4 in 2010 or even an announcement in 2010? Highly improbable. That was the answer. Support for the PS3 hasn't changed for the worse; if anything it's been growing.

Your wrong. I just posted numbers in the OP that said it was incoorect. I posted another chart that shows the same thing. If you beleive this, then prepair to be sorely disapointed.

I thought the production cost reduction and price reduction was self explanatory, but for clarification, dropping the price to $299 opens up a larger tier of consumers who won't pay more than $300 for a game console. $399 just isn't a broad market friendly price for consoles as the last 15-20 years have demonstrated. Drop the price and the sales won't stay the same any more than they did when the price dropped from $499 to $399. The demographics are very different from $499 to $399, and even more so from $399 to $299.

I would hope nobody will be dumbfounded when sales rates take off similarly following a major price reduction, following major production price reductions on the manufacturing and logistics end of distribution.

As IO have mentioned, price drops do not result in long term effects and do not produce long term consoles. The cube was cheaper than the PS2 and it didn't get the boost some people claim. The 360 is cheap then the Wii, and the Wii dominates. The fact that you beleive this despite the evidence points in the other dirrection is mind blowing. Lowering price does not mean you are doing well; it means you are doing crappy and need some way to get out of the hole. It is a sign of desperation. People play price drops off as good things. They are bad things. Let's look at the economics of this.

http://i82.photobucket.com/albums/j263/Smashchu/Demand_curve.gif

http://i82.photobucket.com/albums/j263/Smashchu/Demand_curve2.png

As they show, price drop will have little effect. The demand is the same. This is why cutting a products price is not significant since demand is not shifted but the equlibrium changes.

Your economics is problematic.

1. Theres no Supply curve, theres only one supplier and in this case its Sony. The market can be described as a competitive monopoly so supply and demand would intersect along the average total cost curve for Sony.

2. Demand curves are bowed inward because the demand for most consumer goods becomes more elastic as the price approaches the optimum for maximising revenue and it becomes less elastic thereafter. Your demand curves are bowed the wrong way for the PS3/360, your justification?

1)How can there not be a supply curve. There always is. The graph, or any graph, would make no sence without it. Since Sony is supplying something, there must be a curve for the quanity supplied. No supply curve means no items are supply, meaning no one will demand the product (if we use Say's law). Since Sony supplies the consoles, there is a curve for their supply. It would work like any normal curve, in that, as they increase the price, they can supply more units. They are suppling something; thus, a supply curve.

2)Here is my explinations

Elasticity woulb be where a change is price has a lower change in quanity demanded. Inelasticity would be a change in price give a large change in quanity demanded. So, for the PS3 and 360, they will increase greatly when their price drops, however, as price drops more and more, the consumers deamnds it less and less. The price drops, in this case, would simply pull in those people who wanted it, but could not afford it. This is evident that the 360 is a lower price than the Wii, but it is demaded less by consumers. The Wii works in reverse. The higher the price, the less change in quanity demanded. This is evident by the fact that people payed premiums to get Wiis during 2006 and 2007. My theory is that when Wiis drop in price, consumers will eat them up.

I constructed these by understanding elasticisty and inelasticisty and combined them into one with my knowledge of how consumers were buying systems based on changes in price. The Wii's is the only one which could be different since the Wii has never been below $250. It may just be inelastic.

 

1. Because they are they only supplier of PS3s. The assertion that theres always a supply curve is a simplification for entry level grade school economics. In this case the Supply curve is the Average cost curve or Marginal Cost vs Marginal Revenue curves. There is no specific supply curve. Which one you choose depends on whether you consider the console market to be a competive/monopolistic or an oligarchy. (my memories of these concepts are a little fuzzy)

2. Elasticity of Demand is this: Its the percentage change in quantity demanded divided by the percentage change in price. A good for which overall revenue rises as the price drops (approaches mass market price for the concept most used here) is elastic. A good for which overall revenue falls as the price drops is inelastic.

If you want to show higher demand you would simply have the Wii demand curve shifted upwards and to the right of the PS3/360 demand curve, meaning more people would demand the Wii at every price point.

Forgive me, as I've only taken Macro. Thus, i infered everything from what I know if you want a back story.....

  1. No, there will be a supply curve. As the definition goes "The willingness and ability of sellers to produce and offer to sell different quanities of goods  at different prices during a specific time period." Sony is willing (or not) and able (or not able) to produce PS3s. Becuase of this, their output of PS3s is the supply curve. So, yes, there is one. It would work since Wiis have changed in supply. So, like I pointed out, the curve would shift. If you show me a site with some of this info, I might be able to see your line of thinking.
  2. Revenue is a by product of elasticity, not the cause or the main players. Here is how it reads "If demand is inelastic, the precent change in quanity demanded falls but by a smaller percentage but by a smaller percentage than the precent present rise in price. As a result, total revenue increases." Note the phrase in bold. The revenue is a result. Your still right, but the graphs need to be constructed based on how the consumers demands the product, not on the revenue. From what I've read, these graphs work, but are simplistic (they always were). The Wii is not that inelastic on the way down. The PS3 and 360 would also hold true as, appose to what you said, they do not sell any better at a mass market price. Becuase of that, they will not greatly increase quanity demanded when the price falls. of course, with the PS3, it is true that it got a strong push from the first price drop. Combining these two peices of information, I constructed the graph, and it coiencides with what I have read.
  3. Upward sloping demand would imply that as Wiis increase in price, they also increase in demand. This would not work as no price sells more when it's more expensive (tell one item that sold more when price went up. Even when gas went up, people found ways to waste less gas).