theprof00 said:
Because in this economy people don't go after the luxury items, they go after the value driven items. Additionally, we don't know for sure the ps3 is in a price war with MS. It certainly looks like MS is in a price war with Sony, but not the other way around. |
How is Sony not in a price war with MS but yet MS is in a price war with Sony? How does that makes sense when the Xbox 360 is more expensive than the PS3? The price tag is the same but you gotta buy batteries (alkaline or rechargeable) or a recharging kit for 360 whereas PS3 has rechargeability right out of the box. And you gotta pay for Live Gold if you want to play online. Not to mention that the PS3 gives you Blu-Ray and Wi-Fi (Wi-Fi sucks but if you absolutely need it for online, its there) as well. The PS3 is playing the cost value game right now. Not MS. Before the price cut, Sony was losing even in Europe/Others this year. They needed that price cut to be competitive with Microsoft. Third-parties like Activision were screaming for a PS3 price cut and threatened to withdraw their support for the PS3. Sony had to play the price war game or else there would have been devastating consequences.
Microsoft has no need to play the price war game. They are in a secure position. They have a solid first-party lineup, they have support from the third-parties. So as long as they have the software sales to back them up, which they do, they are fine. Because software is where you really make your money. Not hardware. Fanboy bread and circus console war numbers don't matter to shareholders. What's the point of price cutting to death in a console war if you are losing money? The whole point of starting up a corporation is to make money. They didn't burn those billions to build the Xbox brand to please fanboys. They did it to get their foot in the door. To win favor from third-parties. Now that they have third-party support, they have no need to bleed anymore. They are finally in the black. They should keep that going and try to recoup all their investments in the Xbox brand.
Microsoft should avoid selling the Xbox 360 at a loss so as long as they have the third-party support. And they will until the end of the gen because bottom line, third-parties are not going to abandon a console manufacturer that has 19+ million consoles (9 million more than the PS3) in North American homes. So as long as Xbox 360 gamers keep getting quality new games, they're gonna continue buying more Xbox 360 software and more XBL memberships and MS is gonna be laughing all the way to the bank. From now on, the console should be sold at a profit, with periodic price cuts after manufacturing costs go down significantly.
