pitzy272 said:
RolStoppable said:
pitzy272 said:
A lot of people are saying Microsoft will drop price as soon as Sony does; but, Microsoft just recently redesigned and added features to the 360 (wifi, etc.). I would think this would make it more difficult for M$ to drop price whenever they so please, bc the system is seemingly more expensive now.
I remember Pachter and others said the same thing back in 2009 when the ps3 pricedrop was rumored. But M$ never did, did they? Didn't they just phase out their mid-level $299 SKU and bring down the $399 SKU to $299? Thus, not really a (true) price drop.
With the recent redesign, can M$ drop the 360's price as readily as some make it seem?
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Yes, they can. The 360 is full of tech that is cheap to produce by now, so it won't be an issue for them to drop the price. Also, redesigns usually result in lower production costs, not higher ones.
The reason why they didn't do it in 2009 is because they felt confident and had a big enough overall lead over the PS3 (eight million, I think). The situation is different today. The PS3 continues to close the gap with every week that passes and the overall lead has shrunk to about three million units. Another price cut for the PS3 without a reaction from Microsoft would mean that Sony's console passes the 360 within a few months. If Microsoft really cares for second place, then they won't sit idle once Sony drops the price.
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Typically they do, yeah, except that M$ added several things with the redesign rather than keeping the system the same and concentrating simply on reducing system costs. Adding Wifi couldn't have been a cheap addition, and adding the bigger HD had to cost a bit as well. Otherwise I would totally be with you on this. Like I said, M$ may very well drop the price this year. I just don't think the system production cost is so much less than the system sale price that M$ can drop price as easily as some make it sound.
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HDD prices continually drop. 2 years ago the size that was most cost effecient was the 120GB drives. Last year for the same money the 250GB drives became the most cost effecient. This year it will be the 320GB-500GB drives. So MS/Sony change the size of the drives to keep costs down. This is why the 2009 cancellation of the Elite wasnt a price reduction it was an SKU reduction. If they had done it in 2 steps then there would be no argument. MS adjusted the SKUs down to 2. One without HDD and one with and got rid of the unit with the larger HDD. MS also removed items that they now sell outside of the box. Yes you can get 3rd party, but like Sony they hope uneducated consumers by the official product. WiFi is cheap and was easily a quick throw in.
The financial results from MS division shows that the 360 is very profitable and can easily drop price, not to mention MS also gets to drop price on Kinect as well. PS3 still isnt making much money, it is finally profitable, but Sony wont drop the price and produce losses again. Not to mention the PSN outage costs and I mean the immediate expenses associated with getting the network back in operation, the losses in profit and revenue from operations, and finally the long term costs associated with fines and lawsuits are all going to eat into profit and revenue.
This all adds up to 360 is a better position to drop price. It has been a year longer than PS3. We are approaching the end of 360 year 6 and in 360 history the non HDD model has dropped $100 and the HDD model has dropped $100 from the initial launch. Still I think MS will wait for Sony to drop the PS3 in price b4 they make a move. Possible exception is Kinect. I could see them drop the price of Kinect and 360s with Kinect 1st.
