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theprof00 on 02 March 2010
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Reasonable said:
theprof00 said:
Look, if they put a price tag for 150$+ it's because they know it is going to sell a lot of units. If they set the price tag at around 50-75$ it's because they don't think it will sell very much, and between those two price points I'm not really sure.
But it's all a gradation.
MS is in this for profit. What you guys need to understand is that prices aren't set in order to promote sales. Predicted sales set what the price will be.
You're all (most of you) looking at it backwards.

Actually both Sony and MS have almost made a virtue of selling at cost or a loss to achieve something.  There is no way, unless my understanding of the market, that Natal can launch at $150 dollars.  If it did that would kill it right away IMHO.  That means that, unless MS drop the actual console price, existing owners need to pay $150 to get Natal - that isn't going to have too many takers IMO.  Also, that would mean to get a 360 and Natal you'd be looking at the current 360 price plus $150 for Natal vs current Wii cost - again, I really don't see that working too well.

Many companies get launch prices wrong or have to adjust because their initial view of price elasticity - the relationship between a price and demand, is wrong.  Also quite often prices are set to promote sales - particularly if you're trying to generate demand for something when you're behind in the market.

I might be wrong, and I'll happily eat crow if I am, but I really doubt MS see themselves in the driving seat here.  Wii already has a much bigger install base in less time than 360 and they need Natal to be a success after this much hype or they're going to have a lot of egg on their face - I really don't think MS is in a position to demand a lot of money for an unproven peripheral at this point.

So you're not convincing me I've got it backwards I'm afraid.  I'm still pretty sure I'm right.

 

I'm not saying you're wrong, but you're saying that you don't think it's worth 150$. MS have undoubtably done demand testing and have found a good price that will have the biggest impact. Look, people bought millions of wiis at 250$...for 3 years! People decided that 250$ was reasonable, and might also think that 150$Natal is reasonable. However, lowering the price doesn't linearly or exponentially raise the consumer base, it simply includes more people.

There may be some bundling or deals here and there, but a lower price does not ensure more customers. It ensures desperation. Remember that products themselves are also valued on lol..their actual value. Studies show that higher priced items are seen as better than an exact copy at a lower price. If it's 50$, people might think of it like a shoddy toy and not have anything to do with it.