PS3 cut 'won't worry' Microsoft

[greenmedic88]

Squilliam said:

greenmedic88 said:

Squilliam said:

libellule said:
funny how

by dropping the elite price

they are basically trying to directly counter the PS3 price cut

conclusion : they still fear PS3 a lot ...

Not really...

They don't want to lose market share to the PS3 at $299.

With no mid-range 360 (60GB SKU), the playing field would be $199 Arcade or $399 Elite.

Is MS worried about losing those majority mid-range console sales? Absolutely.

$299 120GB Xbox ("elite") = problem solved. The solution in this case, was actually there before the problem, but they won't react until a reaction is necessary (lower priced PS3). But they're still going to react and that shows concern.

The only thing MS loses is the $100 premium they were charging for an extra 60GB of HDD space and an HDMI cable (which will no longer be included). From a production cost perspective, 120GB OEM HDDs cost next to nothing more than 60GB OEM HDDs. That extra storage stopped being a "premium" $100 feature well over a year ago.

Um, in reality they are losing the high end SKU and not the mid range SKU. Its a convenience issue, and nothing more. Its simply easier for them to drop the Premium and reconfigure than it is to drop the Elite as they are always going to be trending towards larger HDDs anyway. There are rumours of even larger HDDs being offered for people who need more than 120GB.

What they do depends on their goals. I see no room for concern here, they will do whatever action they deem to suit their interests best. They don't have any reason to worry about Sony running away with anything because their 8M console lead gives them room to sit for a year and focus on profitability if they so wish. Sony has far more reason to worry about what Microsoft does than vice versa as the latter really does have the resources to cut the price significantly and the profitability to match, especially considering Microsofts strong Live revenue.

 

MS isn't reconfiguring anything but their pricing. That is a direct response to a perceived consumer reaction of a direct competitor releasing a new model at a lower price. It's in their best interests to do this rather than do nothing at all, which is precisely what they would do if they weren't concerned.

If they drop the "Elite" from the SKU you can make a paper argument that the top end SKU is gone, but the reality is the HDMI cable would be the only thing missing.

If you want to throw out predictions of MS sticking with a three tier console structure and a 250GB, 320GB Elite or higher you would have a leg to stand on, but until that happens, the reality is: mid-range SKU is gone, high-end SKU is down $100.