puffy said:
It's so difficult to tell what may happen because there are just too many variables..
Momentum swings, price drops, unannounced exclusives, redesigns, unannounced accessories, manufacturer strategy etc..
On the Microsoft side of things.. They have the newest value offering, i.e. They just released a redesigned console, a new price for each SKU and Kinect (They basically pulled all of their aces out of their hat). They are the LEAST likely to move on price. However they currently have the most momentum in the market with Kinect resonating very well over the holiday period.
To accurately portray the sales pattern for the 360 in 2011, one would have to predict how well Kinect will sell over the long term.. Will it fade more quickly than expected (brighter candles burn quicker etc) or will it continue to sell at a very high pace. You'd have to look at the demographics of the users buying it, the percentage of people who already owned a 360 prior to buying one and the games that will drive demand in the coming year.
How about the core gamer? Microsoft seem to have a fairly thin release calendar (by 360 standards) this year in terms of exclusive content. Will late adopters switch to another platform if momentum changes due to a steady supply of exclusive content? Will the XBOX LIVE community be able to hold these guys to the 360 to play with their friends?
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Now onto the PS3.. If Sony don't drop the price on the PS3 this year, it'll have gone 2 years without a drop in price and you would expect that sales would suffer for that reason. However, it's also clear that Sony have less room to move than the Microsoft in terms of pricing due to hardware costs and also the potential launch of new portable hardware this year in the form of the PSP2. If Microsoft don't move on price, should Sony? Instead Sony could very well bundle the PS Move in with the hardware to add value to the box. It's a possibility that neither HD console will get a price drop this year.
On the other hand, marketing a product includes pricing it to hit sales targets. Sony's sales targets for this year see the PS3 having it's best year if I'm not mistaken. So if sales are dropping below an acceptable level and Sony want to stall the drop, a price drop is the way they will go. I don't think Microsoft will follow them if they drop the price.
To predict a price drop for the PS3 one must look at the momentum of the system.. It seems to be doing OK worldwide and is actually on track to repeat the success it had last year (although it's very early days), I suspect the launches of exclusive titles in the coming months will help the PS3 maintain its current momentum but that momentum doesn't look like it's going to increase. If those titles can't arrest a fall in momentum, and if the PlayStation Move can't pick up in sales in the coming months with titles like Sorcery coming, Sony may have to consider revising the price of the system.
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Now finally we have Nintendo.. This is the hardest to read.. On face value the Wii is looking to continue its downward trajectory, with falling YoY sales. However what do we know about the Wii? We know it hasn't seen a price cut since late 2009, a similar time frame to the PS3, we know that the system is trending lower than last year, we know that it's still out-pacing the PS2, and we know that coming into 2011 Nintendo's internal development muscle is focused on the launch of the Nintendo 3DS. However it's what we don't know that's really interesting and essential in how one might predict 2011 will play out.
Mario Sports Mix, The Last Story, Legend of Zelda: Skyward Sword, Kirby's Epic Yarn (EU) are really all we know to be coming to Wii from Nintendo that have the potential to drive hardware in any sort of way and honestly, all of them put together won't drive it very far. Nintendo being the secretive bunch they are only leave us with clues and hints as to what they have in store and so you have to predict that here and now if you want to try to predict how the Wii might sell. Will Pikmin 3 finally make it out this year? Is Wii Relax going to finally show up? Will that new IP Miyamoto was talking about show up this year and will it be a Wii title?
It's my opinion that Nintendo delayed the Wii Vitality Sensor until the Kinect hype dies down, they know that with too many new things and up against a $500 million marketing campaign, something is going to be lost in the shuffle.. However how big an impact could it make, is the 'stress' market the next goldmine? Or will it be another failure like Wii Music? Nintendo have the ability to move on price but they will be stubborn (and they should be, they're still out-pacing the PS2) and will have to see quite a drop in momentum before they consider it. The launch of the 3DS could very well absorb part of a Wii price drop however with Nintendo certainly making a tidy profit on hardware at launch. On the other hand, it's also possible for Nintendo to launch the Vitality Sensor earlier in the year than expected and create a new market for relieving stress through gaming thereby boosting momentum and driving sales UP YoY. We simply don't know Nintendo's plans.
So even though I haven't made any predictions, I hope the community can appreciate the level of detail needed to be able to say that you've made an educated guess. My short paragraphs don't even scratch the surface.. I'll be back in the next couple of days though to try to make a prediction.. I hope this post can give a few people a new perspective on a few things though, particularly the huge price drops everybody is forecasting.
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