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heprof00 said said:
The demand of the 250g is one number and the demand for the 120g is another. There is a 50$ price difference, and an 8-10$ cost difference. 120g loses 36$ per console. Your suggestion is to then lower the cost of the 250g? To what, may I ask. What price do you actually believe is going to alleviate 120g demand and at the same time exist for the reason it was designed (to be profitable). There is none. Even a 10$ drop potentially obliterates the profit, the only reason the 250g console exists in the first place.
What I find so absurd about your argument is that you assume you know what the demand is for both of these products. You assume that you know better than the group who has done the research and found the model for their price points. The 250g is already a difficult sell as there is virtually no difference between the two, and it's 350$. 70% of consoles are sold in the 200$ and under mark. 300$ price point is exponentially more marketable than 350$.
Below, we have confirmation of that personality in action. "Sony marketing is not smart enough..." You keep insisting that making a profit on consoles is the most important thing in the business. It's not. The 250g model is a trick. It's a way to charge people 50$ for the same product. Nothing more.
If making a profit is not important (not that they are making one at the moment), then they should just reduce the 250gb cost to just $310 to cover the production cost. 250gb will then sell just as well as the 120gb. Do you think this would not affect the demand for 120gb? Its an hourglass effect, you shift the demand for 120gb to the 250gb. However, lowering the price that low, would just cause a shortage to shift to the 250gb side but this example is a clear logical indication that a price drop on 250gb will reduce demand for 120gb.
If the 'group who has done the research and found the model for their price point' did their job correctly, then there shouldn't be an excess supply of 250gb.. they either shipped too much or priced it too high. Again, pointing to "sony marketing is not smart enough".
Your statement is based on faulty reasoning and silly logic.
Thank you for correcting me, you have opened my eyes.
They got so much because the technology is so crucial to the playstation brand.
They got that much because the royalty and license is worth that much.
When you brought up royalties, you brought them up as evidence which contradicts the 42$ increased profit. I am curious to know what you expect the licensing costs to be. I am thinking maybe 1-2 percent of total revenue, which turns into 35-70$, which is already looking improbable. In this case, the increase from 300 to 350 only costs an extra 50 cents-1 dollar.
I am guessing around *30-50% of revenue. PS3 is simply thousands of technology assembled into one piece of hardware, sony didn't invent anything, except maybe the gameOS.
...You know what? This discussion will not continue until you can reasonably explain why the ps3 demand is an hourglass. That assumption figures that a buyer MUST buy one or the other without other options. Options include "waiting", or buying from the competition. From now on, we are going to go through each and every one of your points until you realize that your statements are indeed "wild".
You are right, there other factors that you can take in account like Xbox and wii. Best to see 250gb and 120gb as different consoles and they are competiting with each other. Its similar to PSPgo and PSP (or DS and DS XL), they are basically the same hardware but they are sold as a competitor of each other. Individually, 120gb and 250gb make up part of the PS3 and the console market share.
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