theprof00 said:
Sony needs to cut prices to appeal to the consumer, not to push MS out of the way. By cutting price, MS is creating the atmosphere of a price war. They want the consumer to look at the initial cost, instead of the value. But you're right, it is smart to return price cut with price cut. But at the price Sony was setting, MS was dropping their price even further. It's not like they were matching the pricing, they were outdoing it. That is in essence, a price war strategy. Sony has yet to sell a console for cheaper than the cheapest MS console. Consider as well, that MS needed to push Sony out of the way because of the sheer amount of brand recognition and dominance Sony has had over the last couple generations. There are several ways to enter a competetive market and be successful, and one way, is to take big initial losses in order to grow your base. That is what MS is doing. Yes, MS is taking losses at the most opportune times (in retaliatory price cutting) but that's only standard business. When there is increased competition, you must increase competition. Just because it is standard business does not mean that it isn't a price war. It's a fine line and no doubt confusing, but sony is dropping price to reel in consumers who are on the fence, and MS is dropping price "turn" new customers. There are numerous people who wanted to buy a ps3 at launch but could not afford it. |
Well, first, I don't think having the attitude to push a competitor out of the way is necessary for there to be a price war. Whoever cuts their prices first or second is irrelevant. If M$ didn't cut their price, or if Sony didn't cut the price in the first place (and then M$ did), that would be different, but since they both cut their price, regardless of the reason, they're still competiting through price.
Though I will concede that MS most surely did it completely in response to Sony's price cut. In otherwords, I wouldn't be surprised if they'd talked about it months in advance and said "let's just wait until Sony cuts the price on the PS3".
I think your 3rd paragraph doesn't matter. Comparing the success of the competitor-free PS2 to the current situation is just silly.
Also, M$ isn't at a loss with their system. If they really needed to push Sony out of the way, they would be selling elites are 200-250 by now. BUt that's unnecessary, Microsoft, as a brand, is amore recognizable name than Sony, even if not in the gaming market. If you live in the US and don't know about Sony, then your uninformed. If you live in the US and you don't know about M$, then you may be a hermit. Nothing wrong with that, but at least in the States, Microsoft has a strong enough name that they hardly need to take losses to get anywhere. And they aren't taking losses, they've been reporting profit (enough to cover the RRoD fiasco too).
