Since when has the 360 been $99 dollars a piece?

[J_Allard]

JWeinCom said:

J_Allard said:
"mass marketing"? Anecdotal at best. I only just yesterday saw my first TV ad for it. And among the retailers that offer the deal, I know it's not advertised in store at Walmart or Best Buy. And on the websites, only Gamestop puts a big emphasis on the deal. TRU shows all systems at normal price and only tells you in fine print at the bottom of the 4GB Kinect/250GB bundles about the promotion. Walmart has a small bundle ad on their 360 systems page but it's in the corner under their huge banner for their own bundles. Best Buy does not even promote it on their website, the only way to find it is to Google. And then it just tells you in stores.

There has been no "mass marketing" of this promotion. I don't think you realize how far back this promotion goes.

And even still, there's no way for anyone to know what effect its having on sales. You can point to lower sales YoY, but logic would tell us that is natural for a console in its 8th year and in a territory where it has a huge advantage in install base. I could counter with the facts that 1. the promotion is still going. If it was having no effect then they wouldn't continue it. And 2. they recently expanded it out into more retailers. Again, something that would be not done had it not been showing some form of impact.

There are certainly signs and promotions in store at best buy.  At least mine.  As for why they would keep it going and expand it if it's not showing impact, the simple response is why the hell not?  Running the promotion isn't costing them anything and each time a customer signs up for it, they make an extra hundred and sixty bucks over the price of the normal bundle.  Keep in mind, not every customer buying this would have bought X-Box live in the first place.  At the very least (assuming the customer would have bought X-Box Live for two years at full retail price) they're making an extra 50 dollars or so.

So, if Microsoft sells a modest amount, lets say 25K, of these per year, that's at least an extra 1.25 million dollars over the course of two years and at most an extra $ 4,000,000.  So, even if the promotion only snares a relatively small enough of stupid consumers, Microsoft is still making a considerable amount of money.  The promotion may be successful in this regard and therefore Microsoft may want to expand it, but that doesn't mean it's having some sort of massive impact on X-Box sales. 

To go with an overly simplistic analysis, X-Box sales are down 29.1% for february year over year.  Meanwhile PS3 (with no such promotion) is down 26.9%.  So, the consoles are both showing a similar decline.  The X-Box, due to market saturation, is a bit higher.  Unless there is some other factor that is dragging X-Box sales down to negate the effects of the promotion, we can reasonably conjecture that the promotions effect is minimal in a units sold context even if it is profitable for M$.

I stopped reading at "why the hell not?". My mind has been blown, hard to argue with business sense like that.