Analyst: 360 Needs More Than a Price Cut

[Sqrl]

kowenicki said:

Sqrl said:

I don't know what this analyst is talking about specifically but it definitely seems to me like the 360 has lost momentum, perhaps not in terms of raw sales but still.  There are more consoles overall being sold right now and the 360 is taking a smaller portion of that larger number than it was last year.

Just as an example, the first 6 months of 2007 MS claimed 22.09% of the console market, but this year that number has slipped to 20.62%.  The fact that they increased raw sales is a good thing certainly but when your competitors also increase raw sales over the same period and more than you did as well, then it is fair to say there may have been a loss in momentum.  In this situaiton the increase in raw sales is not sufficient to determine momentum because the increase effected everyone not just you.

The underlying point is that the increase in sales for all consoles is due to global market factors and not just MS's momentum.   A good analogy perhaps would be inflation and income, you can't just directly compare your income with that of someone working in 1950.  While the units may be the same the scale is not.

Just to throw some raw number weight behind this:

	First 6 months	Total
	2007	%	2008	%
360	2,397,432	22.09%	3,695,503	20.62%	6,092,935
PS3	2,512,322	23.15%	4,966,312	27.70%	7,478,634
Wii	5,942,801	54.76%	9,263,120	51.68%	15,205,921
	10,852,555	100.00%	17,924,935	100.00%	28,777,490

 

Oh OK, so the Wii is losing momentum as well then.... do me a favour!!!!!!   lies, damn lies and stats!!!!!!  jesus.. arrgghhhhh!

 

 

Now that I've had a chance to look at this a bit closer I'd like to point out that it's a whole hell of a lot harder to lose market share when you have 22% than it is to lose when you're at 50%.  This is the way percentages work.  If you and Bob have 25% share and I have 50% share then I'm selling 2 units for every 1 you do.  Assuming the market was 200k units per month, if you increase your sales by 50k units per month it means the new market is 250k and now I'm at 40% market share, you're at 40% market share and Bob was at 25% before but is at 20% market share now.

Percentages shift non-linearly.