February 2015 NPD Thread! 3DS: 395k, PS4: 342k, XBO: 276k, WiiU: 96k

[ReimTime]

SWORDF1SH said:

ReimTime said:

Yes but production costs fall as a console generation goes on. Materials become cheaper and manufacturing can always be placed more heavily on companies like Foxconn. I don't think they'd lose out too badly on a price cut, and I agree with intrinsic that an install base is very important

Wrong. Not matter how much you make or lose off of a console you still have $100 less if you cut it by $100.

2 years from now if it was still $400 and they made $200 per consoles and sold 15M a year;

15M at $400 with $200 profit = $3B profit

20M at $300 with $100 profit = $2B profit

You have to make $1B to make up what you lose. (BTW I think a $100 pricecut will boost it a lot more than 5M. Then you have to consider can they manufacture enough to take advantage of pricecut)

 

Sony have to weigh up if cutting the price is worth it.

The average customers spends so much a year so the sooner they get customers the more years you will have them spending. If they project to gain more from a price cut they will do it. But for that to happen the price cut will have to boost sales enough to make it worth it.

Fair enough, but IMO cutting the price is worth it. Lower price = more sales = more income from software and PS+. I think the balance that they need to find comes with a price cut, because the money you say they will lose can be made up through other means that produce more income with a higher install base. If the price cut is incremental and reflects the lowering cost of manufacture, the profit will be higher than it is now.