Worldwide UP - August 27, 2011

[Alby_da_Wolf]

ultraslick said:

Alby_da_Wolf said:

Playstation grabbing the home theatre market from Windows isn't anymore one of MS worries, Android expanding even more than PS2 could just dream about is. So MS will cut price only when needed, not just to fight with Sony for WW 2nd place, as long as its leadership in America is safe. This doesn't mean that MS won't cut XB360 price, it eventually will, but not just for e-peen sake.

Notice that PS3 and XB360 are the only HW up this week, OTOH Wii just had a price cut, but its effect is already wearing down. XB360 is already affordable without price cuts, Wii was already too even before the cut, PS3 was the most expensive, so it actually was the one that could benefit more from a cut, but once the price is right, the thing that counts the most are the games, and both MS and Sony currently are lucidly acknowledging it.

Finally, there are many, not mutually exclusive, possible reasons for Sony to cut by just $50: cutting profit as little as possible, not wanting to start a price war with MS, planning to start permanently bundling Move with every PS3 in the middle term without increasing the entry level price, planning to release a lot of bundles for Xmas, this latter move, again, to add value instead of further cutting price.

Sony and Microsoft have different views of the same situation currently. Microsoft is making money and their third party relationships and games will not be affected at this point even if the ps3 outsells it until the start of next gen. So why cut the price?

But for Sony, they want to increase the userbase, solidify the brand and recapture former glory in the eyes of the hardcore gamer now, before they launch the PS4.

With these paths pretty much clearly laid out, Sony's "e-peen" as you say will get bigger and bigger. And the PS3 will catch the 360 in ltd hw totals.

I have been waiting for years, could happen now within 18 months.

Pretty much agree, but increasing the user base, both to increase SW sales and strengthen the brand before PS4 launch isn't e-peen growing, it has very serious purposes. E-peen would be a price war for short term sales leadership and that's the thing I don't see MS and Sony doing likely. Also, for both companies, cutting prices following their own plans, supporting the cut with regular games releases and new peripherals and not chasing each other worked very well, while it's quite obvious that neglecting games library and rushing the last cut worked horribly for Wii.

One last reason for this unexpected peace between MS and Sony: the premature demise of the almighty Wii offers both companies more room to expand without starting again a war. If such room shrinks too much, they'll make war again, but right now it would just be masochistic.

To sum it up, I see too Sony making PS3 grow as much as possible and MS doing the same for XB360, and they'll also cut price to do it, if and when necessary, but I don't see them anymore harming each other and themselves to do it, at least in the short and mid term.