No pricecut for PS3?

[Kantor]

Squilliam said:

Kantor said:
Microsoft wouldn't cut the 360 price to $150. That reeks of desparation, and would be a last resort. They have to think about profit, as well- Arcade is already the most popular SKU, and cutting price is cutting income, which is cutting profits. Microsoft probably profits more on a $300 Pro than a $200 Arcade. They would prefer that people bought the Pro. So they would have to cut the Pro to $250 as well, which would lose even MORE profit. So their choices are:

1) $150 Arcade, $250 Pro, $300 Elite. Like I've said, this isn't very logical.

2) $179 Arcade, $250 Pro, $300 Elite. Like the last one, but more likely.

3) $200 Arcade, $300 Elite (essentially changing the Pro to the Elite and cutting the Elite)

I believe the current Ars Technica rumour suggests 3)


I only think Sony will cut the PS3's price this year because of their forecast. They wouldn't increase YoY sales by 30% for no reason when they can see that they are clearly down YoY at the moment. Sony are not idiots- they got their last prediction spot on (10 million in FY 08). $300 is probably most likely, with some feature or other taken out (I would say Bluetooth and WLAN are two likely candidates- separate adaptors could be made available), with an 80GB HDD, and the current 160GB would be cut to $400 (still bundled with a game, with all features intact)

And they'll probably make PS2 emulation possible via a FW update, so people will stop complaining about that.

Well well Mr Kantor! You're 66 posts into your career at vgchartz and this smut is all you can come up with? Hahahahahahahahahahahahahaahahahahahahahah I shall defeat you with mere words formed into phrases. Phrases are your biggest weakness!

Tell me, why would cutting the Xbox 360 Arcade price in half 4 years after release be desperation? The PS3s price has been on a similar trajectory as well, only the PS3 would have cut the price in half @ $300 one year sooner, that can be described as desperation in anyones language because they have already booked the losses on their future balance sheet. These losses will hurt them as a company as on a whole you already know how much trouble Sony are facing right now. Please, I don't like the words desperation used when describing console strategy, surely some kind of non desperation description would be preferable?

Microsoft profits on games, accessories, Live and downloads. They lose a little money on the Arcade but they make money on the Premium and Elite SKUs especially. A purely profit maximising strategy for them is essentially to get as many consoles sold at a price which maximises long term return. The reason why they are able to make so much money from Live in America is because they have a 2:1 console advantage so people wanting to go online with their friends have to use their service. Theres no way they would want have this profit jeapordised and they would sacrafice a lot to keep the PS3 from gaining a foothold in this market.

I also heard rumours! Rumours I heard about were about new HDDs for the Elite and Premium SKUs. So, yes it does make sense that they would cut the price of both the Elite and Premium as they have to get rid of that old stock. The price cut rumours from Ars are precisely that. I would say the best SKU strategy would lower the Arcade price down whilst changing the contents of the SKUs to rebalance the purchasing stratification on a higher level SKU and increase the importance of the Premium and Elite SKUs. That way if people are willing/able to purchase a more expensive SKU they do so, essentially cut the price but keep the average sale price relatively close to the current $270 it rests at.

My current feelings about their strategy would be this:

$150 Arcade to target the lower end consumer, PS2 sales etc and hit Sony where their highest home console profit margins lie. Also it keeps up the psychological bonus of having an SKU half the price of the PS3.

$225-250 Premium. They will give it a larger (120-180GB) HDD and better game bundle. They will also keep the 60GB starter pack to entice people to go straight to this SKU rather than getting an Arcade + Starter pack which has lower margins. Theres also no rule which states explicitly that the price difference between the Premium and the Arcade has to be $100, remember the Arcade is for people who just want an offline only console or can't afford to pay for the Premium's price premium.

$300/$350 Elite. They will make the HDD something quite massive like 320 or 500GB, im thinking the latter and (maybe?) they will make that HDD size unavailable as an upgrade so people have to go straight for the Elite if they want the HDD space. This will have more of a core gamer bundle and may even include wireless in the packaging as well to give it parity with the equally priced SKU and fits the multimedia purpose of the SKU.

As for the PS3: They can't exactly cut out the Blu Tooth because thats what the console uses to connect with the controllers. They can offer a wireless free SKU, which may help save them money as the people who need the functionality may be willing to pay the extra $50 for the larger HDD SKU. I suppose also if the PS3 can connect with third party wireless products it would work, though its hard to say how much money they would save doing this.

 

 

 

I'm done crying now. So,

1) I have more than 66 posts, thank you very much. Does your keyboard not have 0's on it?

2) Because they just gave it a price cut last year. Two price cuts in two years = BAD! Also, the Arcade hasn't been around for four and a half years, it used to be that crappy Core thing which was somehow different. It had a different name, though! Likewise, the 40GB's price was not cut at all- it was $400 at launch and $400 when they discontinued it for the showoff 80GB. The 20GB was $500, but they canned that when they realised everyone hated it. But I suppose desperation is a bad word. Perhaps "moving too quickly" would be a better way to decscribe it. They plan on supporting the console for a good five more years, they need to space out their price cuts, or they'll have a 360 that costs less than its games!

3) They lose money on the Arcade, and make money on the Pro and Elite- that's exactly what I was saying. So they want to discourage people from buying the Arcade- they'd much rather they bought the Pro or Elite (though Arcade is better than no 360 at all). Cutting the Arcade's price would not help their cause. If they cut the Pro's price along with it, they'd be losing money on everything, and then they don't want any 360s to be sold so they might as well go work for Sony (I am aware that that logic was flawed, since Sony isn't working for Microsoft yet)

4) There are rumours of everything. There are rumours that Sony is launching a PS3 facebook. There are rumours that there will be no PS4. There are rumours that Michael Jackson is still alive (I'm sure there are, anyway). But my rumour came from a site called Ars Technica and that is an awesome name, so my rumour is better.

5) I would predict a $179 Arcade (it was the PS2's price after $199), a $250 Pro (if and only if they can cut costs in some way) and a $300 Elite, if there is a price cut at all, which I still doubt (see 2))

6) Damn, I forgot about the controllers. Damned pesky controllers. Er...they could take out the chrome trim, I'm sure that would save them $200 or so. It's a last resort, though- they should take out Blu-ray before they take that out. They could also move to China, where living costs are lower, so they can reduce everybody's salary.