UPDATED:Do you think the Wii U will get a price cut this year?

[sc94597]

Dr.Henry_Killinger said:

sc94597 said:

Only if you assume the demand curve is linear, which is a poor assumption, as real world markets usually don't have linear demand curves. A $50 price drop from $400 to $350 is not going to have the same effect as a $50 price drop from $350 to $300 or $300 to $250. The following graph illustrates what a real-world demand curve might look like. 

 

The guesstimate I proposed doesn't imply a linear demand curve, it approximates base demand as a function of sales over time (Linear) and assumes the success of the price drop (sales gain/demand incease) increases (exponential) as the overall price drops.

At most we have two data-points ($350 and $300 for Wii U Deluxe.) Any "meaningful" extrapolation must be linear. If you are going to use exponential growth how would you accurately determine the growth rate from only two data points? We have the initial conditions (50k for XBO at $500 and 30k for Wii U at $350.) Then we have two more data points for XBO (@$400 and @$350) and one for Wii U (@$300.) I mean there really is no way to predict how a price cut from $300 -> $250 will affect the Wii U based off its previous price-cut and the XBO based off its previous price-cuts. The data is just too little to create a useful trend. It would be easier to predict the value price of targetted demographics, but that is also extremely hard.