| Arkaign said: Landguy, the PS4 price cut doesn't have so much to do with competing with others as it has to do with broadening their reach. They should be within range to hit $299 this year, and that opens the door to the mass market buyers. $400 or even 350 is too much for most families for an initial console investment, but 300 amd under puts it in the impulse territory for many millions of additional buyers. And the business is classic razors and blades, as long as they aren't loss leading the console itself, they know the real profits come from software, accessories, and PSN. Loose example here, but say dropping to 299 nets them 4 million more console sales during one year, and the average buyer purchases two games, $50 worth of accessories, and every other buyer opts for PS+. They win big time compared to sticking with 399 and not having that reach. There is also a networking effect as those 4m customers make it more likely to have uptake with their friends and family buying into ps4. So even if only Sony made consoles and Nintendo and MS were out or software only, they would have every reason to drop the entry price as possible along tiers. I feel the $399 market for consoles is going to be extinguished this generation very soon. There simply aren't infinite consumers willing to pay that much. In every previous gen the bulk of the sales occur at 299 and under by a pretty big margin, and the upside is that once someone has the console, selling them a $60 game or various DD deals is much much easier than swallowing that big initial cost. |
I agree with all of your statement as far as how they profit from the "other" stuff after selling the PS4. THe differnce is that I disagree that they need to drop the price of the PS4 by $100. If they are selling units faster that they hoped or dreamed at this price point, I don't agree that they need to drop the price $100 just to get the average joe into the mix. I know they will drop it $50 any day now, but $100 is not cecassary. In my opinion, $299 is not the sweet spot, it is $249(based on what i remember). There is better value to them to drop the price to $349 and include pack ins that cost 20% of retail to them. Sony still sells the PS3 to the low end of the market. Next year, they will release the slim and that will be $299 or maybe as low as $249. THat's when the rubber hits the road for them with bottom end buyers. The theory that $299 works is untrue. Most people have to buy a game and another controller and PSN. THat adds back up to $450+. Consoles have to get a lot closer to $200 before they go mass market on price...
Funny thing is that Apple keeps selling their iphones no matter what they charge for them. They have not dropped the price for their new Iphones EVER. So why would Sony feel that their clearly premium device should be dropped in price if it is selling awesome now.
It is near the end of the end....
