kn said:
Actually, it's really not that funny. It's quite obvious to me... The funny part is how "unobvious" it was when Sony decided to put out a box at $600. You can use any parallel of any product you want. Cars for instance: Honda Accord - Sells by the bazillion. Quick, Agile, great for the masses (and sells that way) Chevy Corvette - Sells well, but by no means anywhere near the Accord. Ferrari - Sells just a few thousand a year, if that, but they are an ultimate car. It is all about the price of the product as it relates to relative pricing in the mass market. A Camry, for instance, is priced about the same as an Accord and sells relatively the same number of units. Lamborghini is comparable to the Ferrari and sells roughly the same. And so on... |
One of the barriers that appears for all luxury products is that most people simply can not afford your product, of those that can afford your product few people have an interest in it, even those that have an interest may not be able to justify the purchase.
In terms of the PS3 (pulling numbers from my posterior)...
- Only 1/3 of households in North America can afford to buy a $500+ console
- Only 1/3 of people who can afford a $500+ system only 1/3 have an interest in the type of gaming it provides
- Only 1/3 of people who can afford a $500+ system and are interested in gaming are willing to justify the purchase when there are cheaper alternatives on the market (XBox 360, Wii, PS2, etc.)
So from my fake numbers the PS3's potential market has shrunk from approximately 100 Million households in North America to just under 4 Million households.
In contrast consider the Wii's strategy
- Nearly 1/2 of housholds would be able to afford a $250 system
- Nearly 1/2 of housholds who can afford a $250 system are interested in a gaming system
- Nearly 1/2 of those households can justify the purchase
Overall the result is that the same 100 Million households is only shrunk to 12.5 Million potential customers. (The number of households who would be interested in gaming was assumed to increase with the lower price because people who have a lower household income [younger families, single people] probably would be more interested in gaming at the current time.
