| Kyuu said: I don't think I'd have to wait that long to gather that Microsoft made a serious miscalculation. Actually the bolded pretty much shows why it's indeed misfired. MS thought this generation will play out like X1/PS4 vs X1X/PS4 Pro where the low powered/cheap SKU sees higher demand or sales. They kept the Series S a secret until not long before launch as if to checkmate Sony. It seems that by design, the Series X was positioned to be their limited-quantity/enthusiast SKU that's just there to assist the Series S, their primary SKU. This would not pan out well in a long generation. Series S has very little room for effective long term pricedrops compared to PS5 and Series X (see Wii vs PS3), and it's underpowered right off the bat, meaning it will age rather poorly especially if a midgen upgrade is planned. When/if midgen upgrades are launched, a lot of AAA developers will push for fidelity high enough for base (by then cheap) PS5 and Series X to struggle in achieving 1080p+/40+ fps (You wanna go higher? Get the PS5 Pro, or the Xbox Series XL, or a capable PC!), Series S won't be able to adequately handle games with such high workload. We're not yet feeling the S limitations because we're still stuck in the crossgen period, the vast majority of console-grade games are souped up/upgraded Xbox 1 games. If Series X meets demand and continues to sell less than the S, I'd blame it on Microsoft's marketing and people giving up and switching to PS5 or PC. As always, I may be wrong and Series S does manage to appeal to a new large dempgraphic, but so far I'm not feeling it and I don't think it'll happen. The Series X and PS5 aren't priced as "hardcore gamer" consoles. With inflation in mind, they're priced in line with typical powerful consoles. I don't know why you're assuming demand will decrease over time in favor of the Series S. The only notably underpowered home consoles I can think of are the Wii and Wii U, one managed to find huge success by appealing to a new dempgraphic early in its lifecycle, but ultimately having weak legs because it aged poorly (I predicted that), and the other was a commercial disaster. It's less that PS5/Series X are "hardcore", and more that Series S is too cheap/underpowered. The existing console playerbase have no problem paying up to $500 ($400 for digital editions) for a powerful console, the Series S is trying to solve an issue that doesn't exist. |
I agree that the Series S has little room for effective long-term price drops. What I see as the flaw in your analysis is that Microsoft is predicting that the PS5 and Series X *also* have little room for effective long-term price drops. Typically consoles are sold at a loss up-front, but with cost reductions so substantial that they can later be sold at a profit despite significant reductions in MSRP. What Microsoft said in the Eurogamer interview that I've been referring to, is that their road map doesn't show substantial cost savings due to moving to smaller processes. They will likely realize some cost savings over time, but not as much as in the PS4/X1 era, which itself was not as much as the PS360 era. Therefore, Microsoft and Sony are likely going to have to choose between selling them at a profit, or significant MSRP reductions, they likely won't enjoy both. They could maybe split the difference (sell them at cost at moderate MSRP reductions). But that significantly changes the rest of your analysis, IMO.
You also misquote me. At no point did I assume that Series X demand will decrease over time in favour of the Series S. I indicated that Microsoft suggested that, not that I was saying it was necessarily going to be so.
