joeorc said:
Smashchu2 said:
supercat said:
jarrod said:
Can anyone name a 2nd/3rd place console that had a true 10 year cycle? 10 year plans are great PR (which Microsoft has espoused too btw), and lovely in theory, but there's a difference between that and it actually happening. Companies can't keep platforms on shelves through sheer force of will alone, it's quite literally the market that decides if a console sells for 10 years or or not. |
But now we have new developments which make a 10-year plan look quite attractive:
-slowdown of die reductions, moore's law is coming to a close, fast, and soon the die reductions won't be that much of a deal. With chips staying the same size and not shrinking much, there is little need to move onto something more powerful.
-The Ps2 had a 10-year cycle.
Your thoughts are brilliant, tell us more.
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I think you misunderstand sales here.
The 10 year life cycle that Sony talks about is marketing smoke and mirrors. They said that becuase they thought that demand would be so high that the system would last 10 years and they were prepaired for that. The other two systems lasted 10 years because they were in high demand and still had games come out for them, but even then, they sold at very low ammounts and were drawfed by their newer versions. The PS3 can not have a 10 year life cycle becuase they system isn't selling well enough now. Consoles are a momentum based market, meaning they are defined early on. Sony has not got the steam to keep the system appealing for 10 years.
Rule #1 of business. The customer runs your business. A 10 year life cycle is only possible if customers buy your system for 10 years. The systems that will have a 10 year life cycle are the Wii and the DS.
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how has PS3 not been in demand?
except when the price was very high!
the key has been and alway's was the price!, it was just too d@mn high for people, and now that the price has dropped the demand is still high for the system,and yet there is people on forums that like to post that still say i am not going to buy one until it hit's $200.00 or less, like that's some kind of negative you seem to be trying to make it out that the demand is not anywhere it should be.I do not think that is the Case at all since the PS3 is not even at the $200.00 price point or less.
for one Sony support's their product's far longer on the market than many other companies have showed to drop the production of the product.
I think your trying to say that right now that the PS3 is not in high demand.Which you may have people that will disagree with you but I do not agree with that at all. the consumer has buying power only to the product's that the company's that create the product's after the companies release the product. If the product was not released in the first place the Consumer cannot purchase the product anyway.
Yes consumer's can make or break a product after it get's released, but also if the company keep's the product on the shelf, if they want to keep spending the Money to do so they can, it's not wise to do it but they can.
already the xbox360 and the Wii have hit that Price point of $200.00 or less
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First, and very importaint, drops in price do not increase demand. They change quantity demanded.
The basic demand relationship is between the price of a good and the quantity supplied. Generally the relationship is negative or inverse meaning that an increase in price will induce a decrease in the quantity demanded.
Movements along the curve occur only if there is a change in quantity demanded caused by a change in the goods own price. A shift in the demand curve, referred to as a change in demand, occurs only if a non-price determinant of demand changes.
This is the biggest thing that pisses off Econ teachers. Also, understand this: if a console has to have price cuts, it's not doing well. The DS never had a price cut save for very early one. The Wii didn't have a price cut until sales slowed thanks to the bust that was Holiday 08. It had to cut it's price 50% in three years time. But, you say demand is high for the system. I say it's on life support. There are three reasons the PS3 (and 360) has lasted as long as it has
- Brand Name
- Third party support
- Constant price cuts
Third party support is very interesting. It used to be thought that 3rd parties would support the winner as they have the biggest room for growth. However, this generation, that did not happen. All the support goes to the 2nd and 3rd place console while the winner gets piss poor scraps. This is a big reasons the HD consoles are even relevant. All of the big titles are on the losing systems. This has helps Sony and Microsoft keep their systems alive. Even then, they have still had to cut price a lot.
Now, let's take this into the future. Let's say everyone releases systems in 2012. What happens to all the 3rd party support. Why, it goes to the new systems. Major third parties get a jump on new systems and forcus most of their resources on the new systems. So that means all those titles wont be coming to the PS3, weaking sales (if third party support was allocated logically, the Wii would be around 80-90million and the PS3 and 360 would be struggling to get to 20 million). That means people are going to ignore the system. Also, you can't cut price forever. What's next, $200? $100? $50? Might as well give it away for free. Eventually, price would be too low to cut anymore, putting a cap on one of the biggest way to push consoles this generation. What else does it have but brand name?
Now, the other thing is you over emphasize a companies power. They can try to increase demand for a product, but the market always wins. Just becuase a company keeps pouring money into a console doesn't mean it will increase it's sales. You can cut price, advertise, and do all of that, but the market is going to judge it one way or another. Right now, the market says we will not have a 10 year life cycle becuase the market doesn't demand many now. How many Gamecubes were demanded in 2006 or 2007. Not very many. That's becuase the Gamecube didn't do very well during it's life. So, do you think Sony can keep the system alive for 10 years. Let's not forget that investors do not want a company to put money in a product with marginal returns. They would like to see higher returns with a new product. Company don't just sit on one product for so long. Apple's products are successful, but they still make new ones.
