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Forums - Sales - What price cut can we expect from Microsoft this Fall?

 

What price cut can we expect from Microsoft this Fall?

$179 14 16.28%
 
$149 41 47.67%
 
$129 7 8.14%
 
$99 8 9.30%
 
No Price Cut 12 13.95%
 
Other (please post) 4 4.65%
 
Total:86
Squilliam on 01 May 2011
Seece said:

I was looking at Sony's price cuts for the PS2 (was quite surprised!) and wondered what the VGChartz community could gauge from them when it comes to how Microsoft is going to price cut the X360, given its model is going to follow closer to PS2 than Xbox or Gamecube.

PS2
Oct 2000 -$299.99
May 2002 - $199.99
May 2003 - $179.99
May 2004 - $149.99
April 2006 - $129.99
April 2009 - $99.99

X360 (Baseline price)
Nov 2005 - $299.99
August 2007 - $279.99
August 2008 - $199.99

Microsoft obviously likes its price cuts few and far between, if they followed the same model/timeframe as Sony with the PS2, they'd be at $99.99 by now, but it's a safe bet they're going to cut this year. I thought a $129 cut would be on the cards to take them to 2013 720 launch, then a cut to $99 to last till 2015. But given it took Sony 4 cuts to get to $99, I'm not sure MS will do it in two.  $149 > $129 > $99 doesn't seem like a good idea to me though ...

I think you're missing the fact that with 2008 and 2010 they added value to the console. Remember the switch from the Core to Arcade with built in memory and a wireless controller? Also in 2010 they added features to the Arcade by increasing the internal storage, adding Wifi and making the box more reliable/quieter/better looking.Effectively if you count the fact that the memory cards were an added cost on the PS2 they are already at the point where the entry cost of the console is identical to the PS2 in 2003. Now if you also count inflation, effectively the Xbox 360 Arcade is cheaper than the PS2 in the same time period up until 2008. If they cut the price again to $149 this year then the Xbox 360 Arcade will effectively again be cheaper or the same price as the PS2 in 2006 counting inflation.

I will say that *(IF)* they decide to be aggressive in price this year it will be because they want to increase market share and fight off competition from both Apple TV and other competiting consoles as well as poison the well somewhat for the introduction of the NES 6 in 2012. They can afford to be aggressive because unlike Sony/Nintendo they would have a range of products from $149 which has low margins all the way up to $299 and they can also sell $149 Kinect accessories or $60 Xbox Live cards. This doesn't mean they will be aggressive, and as one Microsoft employee pointed out to me 'why cut the price in order to satisfy the worst customers when we're selling every single Xbox 360 we can make?'



Tease.

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Seece on 01 May 2011
Squilliam said:
Seece said:

I was looking at Sony's price cuts for the PS2 (was quite surprised!) and wondered what the VGChartz community could gauge from them when it comes to how Microsoft is going to price cut the X360, given its model is going to follow closer to PS2 than Xbox or Gamecube.

PS2
Oct 2000 -$299.99
May 2002 - $199.99
May 2003 - $179.99
May 2004 - $149.99
April 2006 - $129.99
April 2009 - $99.99

X360 (Baseline price)
Nov 2005 - $299.99
August 2007 - $279.99
August 2008 - $199.99

Microsoft obviously likes its price cuts few and far between, if they followed the same model/timeframe as Sony with the PS2, they'd be at $99.99 by now, but it's a safe bet they're going to cut this year. I thought a $129 cut would be on the cards to take them to 2013 720 launch, then a cut to $99 to last till 2015. But given it took Sony 4 cuts to get to $99, I'm not sure MS will do it in two.  $149 > $129 > $99 doesn't seem like a good idea to me though ...

I think you're missing the fact that with 2008 and 2010 they added value to the console. Remember the switch from the Core to Arcade with built in memory and a wireless controller? Also in 2010 they added features to the Arcade by increasing the internal storage, adding Wifi and making the box more reliable/quieter/better looking.Effectively if you count the fact that the memory cards were an added cost on the PS2 they are already at the point where the entry cost of the console is identical to the PS2 in 2003. Now if you also count inflation, effectively the Xbox 360 Arcade is cheaper than the PS2 in the same time period up until 2008. If they cut the price again to $149 this year then the Xbox 360 Arcade will effectively again be cheaper or the same price as the PS2 in 2006 counting inflation.

I will say that *(IF)* they decide to be aggressive in price this year it will be because they want to increase market share and fight off competition from both Apple TV and other competiting consoles as well as poison the well somewhat for the introduction of the NES 6 in 2012. They can afford to be aggressive because unlike Sony/Nintendo they would have a range of products from $149 which has low margins all the way up to $299 and they can also sell $149 Kinect accessories or $60 Xbox Live cards. This doesn't mean they will be aggressive, and as one Microsoft employee pointed out to me 'why cut the price in order to satisfy the worst customers when we're selling every single Xbox 360 we can make?'

True, I understand why at every stage they havn't needed to cut price, I think they've finally reached the limit though on how they can add value to the 360 *cough* blu ray!! lol jk

I get inflation, and I guess it's a factor, I still think the thresholds are the same as last gen though, with $199 being the mass market sweet point, and $99 being a phase out stage, despite inflation.

I don't think they'll be aggressive, which is a shame. $129 I can't see, although what with their other models bringing in the $$, I think that would serve them well. Even though the 360 has another 5 years selling power before it's completely dead, the next 2 are going to be it's last 2 to really suck in the consumer, so I think being $129 during those years would really help them, then a cut to $99 on 720 release to take them to the end.

But nothing is going to make them cut deep enough to make any sort of loss or break even across the average price of the 360, they're in profit mode for the next 3 years now so they can be more flexible with the 720, I guess they need to prove to investors (well not really) that the xbox gaming division can not only be profitable, but has the potential to really grow.



 

Squilliam on 01 May 2011
Seece said:
Squilliam said:

I think you're missing the fact that with 2008 and 2010 they added value to the console. Remember the switch from the Core to Arcade with built in memory and a wireless controller? Also in 2010 they added features to the Arcade by increasing the internal storage, adding Wifi and making the box more reliable/quieter/better looking.Effectively if you count the fact that the memory cards were an added cost on the PS2 they are already at the point where the entry cost of the console is identical to the PS2 in 2003. Now if you also count inflation, effectively the Xbox 360 Arcade is cheaper than the PS2 in the same time period up until 2008. If they cut the price again to $149 this year then the Xbox 360 Arcade will effectively again be cheaper or the same price as the PS2 in 2006 counting inflation.

I will say that *(IF)* they decide to be aggressive in price this year it will be because they want to increase market share and fight off competition from both Apple TV and other competiting consoles as well as poison the well somewhat for the introduction of the NES 6 in 2012. They can afford to be aggressive because unlike Sony/Nintendo they would have a range of products from $149 which has low margins all the way up to $299 and they can also sell $149 Kinect accessories or $60 Xbox Live cards. This doesn't mean they will be aggressive, and as one Microsoft employee pointed out to me 'why cut the price in order to satisfy the worst customers when we're selling every single Xbox 360 we can make?'

True, I understand why at every stage they havn't needed to cut price, I think they've finally reached the limit though on how they can add value to the 360 *cough* blu ray!! lol jk

I get inflation, and I guess it's a factor, I still think the thresholds are the same as last gen though, with $199 being the mass market sweet point, and $99 being a phase out stage, despite inflation.

I don't think they'll be aggressive, which is a shame. $129 I can't see, although what with their other models bringing in the $$, I think that would serve them well. Even though the 360 has another 5 years selling power before it's completely dead, the next 2 are going to be it's last 2 to really suck in the consumer, so I think being $129 during those years would really help them, then a cut to $99 on 720 release to take them to the end.

But nothing is going to make them cut deep enough to make any sort of loss or break even across the average price of the 360, they're in profit mode for the next 3 years now so they can be more flexible with the 720, I guess they need to prove to investors (well not really) that the xbox gaming division can not only be profitable, but has the potential to really grow.

You have to ask yourself whether a price cut is likely to increase their overall profits. An Xbox 360 Arcade may cost them $140 each and they sell them for $199. If they sell 1M @ $200 and 1.5M @ $149 they will make $59M in hardware profits at $199 and $13M in hardware profits at $149. The extra 500,000 consoles would need make another $92 each to justify the cut. So outside of falling sales and rising inventories, they will only cut the price IMO if they believe it will increase their overall profitability or if they are forced to because of competition.



Tease.

yo_john117 on 01 May 2011

$149--4GB SKU

$229--4GB Kinect SKU

$229--250GB SKU

$329--250GB Kinect SKU

$99-119--Kinect standalone



reviniente on 03 May 2011

I say $149. Though, I think they're gonna have to give the 4gb version the boot in order for this to work. I'm kinda hoping M$ will introduce new bundles, colors and maybe just maybe a bigger HDD at E3. Yeah!



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reviniente on 03 May 2011

Steam support would do us quite nicely, too.



bannedagain on 03 May 2011

I'm going with 149 being the lowest and 179 being the highest. So 150 I think.



reviniente on 03 May 2011
Seece said:
BHR-3 said:

oh i didnt know MS is all you cared about i thought it was consoles sales in general, i dont care for certain consoles either but i do like reading or discussing about what they are all doing or about to do for further knowledge about console sales as a whole 

well im the creator of the console and bundle pricing history that has failed to get picked up on this sales site so i know these things like the back of my hand

Well, I'm a 360 fan (that much is obvious) and although I'll congratulate Nintendo and Sony when they do well, more so Sony because I think they deserve it, I'm not going to write articles or threads about it when it's beating 360. I do this for a hobby.

It's like asking someone to write an article on how their football team got thrashed, when they're not obligated too They just wouldn't lol.

So while sometimes it may seem like I'm rooting or enjoying low PS3/Wii sales (whenever that happens) it's not that, I'm just focusing on the 360 competing side of things. And when they do bad, I'm not going to.

That said my job is to do the weekly articles, and I'll do them no matter who's in front. I also have my gap charts up to date so they'll be updated even when the PS3 passes the 360.

Ha! If it does.