| Sky Render said: I don't think there's a very firm understanding of "market saturation" going on in this topic... Sales levels over time indicate demand, but not the market saturation point. It doesn't matter how fast a product sells initially, what matters is when it starts to drop off consistently (which is when it's approaching saturation). At that point, it's unlikely to ever double its total sales again. With the 360, it saw a high early adoption rate compared to the original XBOX (which is good for MS, since the original XBOX was all but ignored for much of its lifespan), but it's also reached the drop-off point on its sales curve quicker. |
One simple way to describe it is using physics...
For every systemsystem there is the force of momentum which allows them to continue selling at the same (a similar) level, and inertia which has to be overcome in order to raise sales to the next plateau. Once a system hits a saturation point the sales level off and friction begins to slow the sales of the system, at this point you have to apply enough "force" to the console in order to overcome inertia and increase sales just to maintain the same sales level.
The price of a system represents the Mass of the system, and by reducing it you reduce the necessary force to surpass inertia or to accelerate the console's rate of sales.
In this system "Force" is an abstract concept which represents the desireability of the system ...
