Is the 360 in trouble?

[Nidan]

johnsobas said:

Nidan said:

Sony will have to outsell MS by 147,000 units per week for the next year to catch MS lead by the end of 2008, which means that if MS continues the same sales numbers during 08 as 07 they would have to be selling as much as the Wii.

What i find hard to believe is many people on this site are claiming Sony has had a huge boost in sales, which is true, however this was done on the back of a great plan from sony, instead of dropping the price on it lucrative bravio LCD screens, it is giving away PS3's, which have been counted in the sales numbers.
Moreso, this has had some effect on the momentum of Sony's PS3, however these promotions can only be short lived, until other manufacturer counter sonys plan with price reductions on their LCD screens. Launching their giveaway only 2 months from christmas allowed them to win the Christmas battle in the LCD area, while helping to promote the PS3.

If you evaluate the sales volume over the period (NOV/DEC 07) MS clearly sold more units than Sony. Interesting enough i visited a number of retailers in Australia, and found that they were completely sold out of both Wiis and 360's. They did have a sign on the wii stand saying " sorry sold of off Wiis, but plenty of PS3s so thumbs up". talking to some salespeople, they said that they had sold out od 360s before christmas and couldn't get any until the suppliers reopened after new year.

Im not saying that the PS3 wont outsell the 360, but if it did, i would expect it will take another 2 years of astonishing numbers, and by then the war is lost. If MS ends the generation with +/- 20% market share compared to Sony, then that is a great victory for MS.

Also anyone saying that MS blew any profit they were going to make last year with their $50 price drop is dreaming. The $50 price reduction was factored in to their plan. Also the $1 billion cost for the RROD was written off Mid last year.

I think MS will counter strongly this year, with a large competitive game lineup, and a more competitive price. My predictions is that we will be able to see the winners and losers from this generation by the end of 2008. My forecast is as follows

 

• Nintendo Biggest winner, with the largest amount of profit, and largest install base ( as long as they innovate over 2008)

• MS will turn constant profits in the gaming division from Mid 2008 onwards due to their install base. They will finish the generation with a market share 10-15% lower than Sony.

• Sony will sell more units than MS by the end of the generation, however would have conceded the most amount of market share to both MS and Nintendo. They will report a small net profit from the PS3 business, but will need to change their plans for the PS4.

 

I was with you the whole way until i read this. This shouldn't even be up for debate, this utterly impossible and will not happen. Even if the PS3 started profiting like the ps2 for its last 4 years (almost 0
% chance) it would still come short by well over a billion dollars.

All of these numbers don't even take into account the fact that PS2 and PSP are offsetting losses from the PS3 this whole time.

I agree, that there is a slim to no chance that the PS3 could make a profit this generation. However my conclusion that the ps3 will return a small profit come from the following points

•     The PS3 will gain extra sales in the area of a BR player, and if in 2-3 years if BR is selling at more than 20% of DVD, then they will see a higher return in investment.

•     The PS3, like the PS2 will have a long production life.

•     They will reach a market size capable of producing adequate royalties to counter some of the previous losses

I would expect some inter-departmental accounting going on, for example, they could be offsetting some of the PS3 losses against the BR department promotional budget, and they would be able to share some of the marketing costs ( everytime they promote BR, the PS3 would get a boost)