Shadow1980 said:
Fun Fact: The PS2 sold better at $200 (~$280 in current dollars) than it ever did at $180 or $150. Every system ends up finding a "sweet spot" price at which they have maximum sales, after which any subsequent price cuts have considerably less impact. In fact, many price cuts have no measurable effect at all. After accounting for other factors (e.g., system-selling software), the PS4 didn't sell any better at $350 than at $400, and even when cut to $300 the PS4's sales only experienced modest growth. The price cuts that have had the biggest effect on PS4 sales in the U.S. are the temporary ones during the holidays. Meanwhile, the XBO did better at $350 than it did for $300 (it's strong performance this year is almost certainly due to the X1X), and the PS3 did better at $300 than it ever did at $250 (and it had its best May, June, and July at $400). At some point, price cuts just stop having a major impact. This is especially the case later in a system's life. Eventually, they start to run out of likely potential customers. Just like wringing out a washcloth, you can go super-aggressive and still not increase the flow of systems leaving shelves. It is indeed possible that a permanent price cut to the PS4 to $250 or $200, with corresponding cuts to the Pro, could produce growth, but there's no guarantee that the growth will occur, or that if it does occur it will be significant. |
Thanks for this data, its very useful.
Other examples would be 3DS, it had a huge boost when it had its first price cut to $169 but revisions/price cuts to $129, $99 & $79 did not stop it from declining.
Same with Wii, it had it's best year when it was at its original price of $249, price cuts to $199 & $149 could not stop it from declining.
When the herd loses its way, the shepard must kill the bull that leads them astray.