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Forums - Microsoft - How much/when will Microsoft drop the price of the 360?

gebx on 18 January 2008
madskillz said:
misterd said:
starcraft said:

 


Oh, MS is far from perfect, but ... one price cut this year, and another next will extend the momentum. All you have to do is look at the numbers. MS is still hanging with the PS3 in several markets (except Japan) and Sony is really using a tiny ice pick to chip away at MS's lead. And it's working, but it's driving Sony so far into the red, you'd think they're Russian. MS is smart not to do a full-court press against a formidable opponent. Even the best basketball team can't do a full-court press for 48 minutes straight.

The point I am trying to make is - a $100 price cut would work well for gamers, but not for MS. It would be a short-term gain for MS. When Sony's heavy hitters come out, MS needs something to counter the Sony steamroller. A deeper price cut, with an impressive library in the background, would foil Sony's efforts big time.

It's all about momentum - and right now, it's a tug-o-war. Who would have dreamed MS would be solidly in second place this time anyhow? It's a marathon - and having two smaller price cuts will keep the MS ball rolling.

I do enjoy reading all of this logic on this board. It's civilized and no fanboy rants. Impressive ... 


I don't expect more then a $50 price cut in NA... As of right now they're still outselling the PS3 in NA, why suddenly cut it by $100?

It's a whole other story for Europe and for Japan. Expect different price cuts for different continents.



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madskillz on 18 January 2008
Lord N said:
madskillz said:


MS is a very patient copy. The Xbox was just a trojan horse to get the 360 to the table. If it worked, cool - if not, they were expecting that too.

The big difference between the Xbox and the 360 is - the appeal and its dominance over Sony - for the time being. Sure, Halo 3, Mass Effect and Bioshock are out, but don't for once think MS has used its big guns yet. MS was the one who pushed for a later GTA IV date. Remember?

I am looking at this from a purely business standpoint. MS rarely - RARELY makes mistakes. That's my plan if I was running the MS entertainment division show.

For Sony to win, take the loss and force MS to counter. I would also sign tons of exclusive games to the system and get the games out, not delayed. One delay and our contract is null and void. Time is of the essence. I would rather win and leave on top or a close second than win by default.

 


I'd hardly call a lead that's only because of a headstart any kind of dominance.

MS doesn't make any mistakes?

-RROD, disc scratching, and various other hardware design flaws that were ignored and allowed to fester and worsen until they turned into PR nightmares.

-360 priced at double mass market price point from the beginning.

-Failure to drop the price in a timely and effective manner.

-Failure to make sure that the game library of the 360 was more diverse instead of the majority of its high-profile titles being shooters, racing sims, and sports games.

-


And yet, they are sitting close to 17M consoles sold, and easily overshadowing the progress of the original Xbox.

As far as MS mistakes, let's compare:

MS - RROD, disc scratching (which happens a lot when you turn your Xbox vertical or horizontal while the disc is playing), Windows Vista and ME - though in defense of MS, I never buy an OS until Service Pack 2 hits - and a few gaming misses

Sony's greatest hits - BetaMax, UMDs, Minidisk, ATRAC® music format, exploding laptop batteries, PS2 disk read errors and Super Audio CDs

Funny that you'd mention the 360 pricing ... it still got a ton of sales, even while being supply constrained for several months. There was also no need for MS to do a price cut - they were comfortable with sales for nearly 2 years and making profits, so why cut into those profits with a price cut? Sony did it within 6 months of launch because they were desperate for sales. And the lineup is very diverse - shooters, sports games, RPGs, driving games - even casual games.

Sony has to find a winning formula to make this race put them into the black ... 



ultimate123 on 18 January 2008
Lord N said:

I would be surprised if MS drops the price at all before Christmas. They waited two years to drop it by a lousy $50, so I don't see why they'd do it again so soon.

A $100 price cut would have been effective right before the PS3 and Wii launched, and they should have done another to $250 right before last holiday season.

As it stands right now, the 360 already has a 7 million lead over the PS3. A price cut probably wouldn't increase it by more than 1million, and MS would still have the Wii to worry about. That being said, such a cut wouldn't hurt Sony all that much, wouldn't improve their standing in the market as they'd still be a distant second behind the Wii, and would insure that MS is stil sitting on billions of dollars of red ink at the end of the generation as the hardware would be sold at a loss. Not to mention, it would look like desperation/uncertainty.

And PS3's $200 wasnt desperate, eh?



End of 2008 predcition:

Wii: 34 million

360: 23-26.5 million

PS3: 15-18 million

misterd on 18 January 2008
ultimate123 said:
Lord N said:

I would be surprised if MS drops the price at all before Christmas. They waited two years to drop it by a lousy $50, so I don't see why they'd do it again so soon.

A $100 price cut would have been effective right before the PS3 and Wii launched, and they should have done another to $250 right before last holiday season.

As it stands right now, the 360 already has a 7 million lead over the PS3. A price cut probably wouldn't increase it by more than 1million, and MS would still have the Wii to worry about. That being said, such a cut wouldn't hurt Sony all that much, wouldn't improve their standing in the market as they'd still be a distant second behind the Wii, and would insure that MS is stil sitting on billions of dollars of red ink at the end of the generation as the hardware would be sold at a loss. Not to mention, it would look like desperation/uncertainty.

And PS3's $200 wasnt desperate, eh?


While it was desperate, it was really only a $100 drop - $500 -> $400 for the low end model, $600 -> $500 for the high end.



madskillz on 18 January 2008
gebx said:
madskillz said:
misterd said:
starcraft said:

 


Oh, MS is far from perfect, but ... one price cut this year, and another next will extend the momentum. All you have to do is look at the numbers. MS is still hanging with the PS3 in several markets (except Japan) and Sony is really using a tiny ice pick to chip away at MS's lead. And it's working, but it's driving Sony so far into the red, you'd think they're Russian. MS is smart not to do a full-court press against a formidable opponent. Even the best basketball team can't do a full-court press for 48 minutes straight.

The point I am trying to make is - a $100 price cut would work well for gamers, but not for MS. It would be a short-term gain for MS. When Sony's heavy hitters come out, MS needs something to counter the Sony steamroller. A deeper price cut, with an impressive library in the background, would foil Sony's efforts big time.

It's all about momentum - and right now, it's a tug-o-war. Who would have dreamed MS would be solidly in second place this time anyhow? It's a marathon - and having two smaller price cuts will keep the MS ball rolling.

I do enjoy reading all of this logic on this board. It's civilized and no fanboy rants. Impressive ...


I don't expect more then a $50 price cut in NA... As of right now they're still outselling the PS3 in NA, why suddenly cut it by $100?

It's a whole other story for Europe and for Japan. Expect different price cuts for different continents.


Yeppa, I co-sign on this. A business won't cut prices unless they are a. trying to move items or b. trying to generate sales against a competitor. Doing it to help the consumer is complete, industrial hogwash. 



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MrMafoo on 18 January 2008
madskillz said:
Lord N said:
madskillz said:


MS is a very patient copy. The Xbox was just a trojan horse to get the 360 to the table. If it worked, cool - if not, they were expecting that too.

The big difference between the Xbox and the 360 is - the appeal and its dominance over Sony - for the time being. Sure, Halo 3, Mass Effect and Bioshock are out, but don't for once think MS has used its big guns yet. MS was the one who pushed for a later GTA IV date. Remember?

I am looking at this from a purely business standpoint. MS rarely - RARELY makes mistakes. That's my plan if I was running the MS entertainment division show.

For Sony to win, take the loss and force MS to counter. I would also sign tons of exclusive games to the system and get the games out, not delayed. One delay and our contract is null and void. Time is of the essence. I would rather win and leave on top or a close second than win by default.

 


I'd hardly call a lead that's only because of a headstart any kind of dominance.

MS doesn't make any mistakes?

-RROD, disc scratching, and various other hardware design flaws that were ignored and allowed to fester and worsen until they turned into PR nightmares.

-360 priced at double mass market price point from the beginning.

-Failure to drop the price in a timely and effective manner.

-Failure to make sure that the game library of the 360 was more diverse instead of the majority of its high-profile titles being shooters, racing sims, and sports games.

-


And yet, they are sitting close to 17M consoles sold, and easily overshadowing the progress of the original Xbox.

As far as MS mistakes, let's compare:

MS - RROD, disc scratching (which happens a lot when you turn your Xbox vertical or horizontal while the disc is playing), Windows Vista and ME - though in defense of MS, I never buy an OS until Service Pack 2 hits - and a few gaming misses

Sony's greatest hits - BetaMax, UMDs, Minidisk, ATRAC® music format, exploding laptop batteries, PS2 disk read errors and Super Audio CDs

Funny that you'd mention the 360 pricing ... it still got a ton of sales, even while being supply constrained for several months. There was also no need for MS to do a price cut - they were comfortable with sales for nearly 2 years and making profits, so why cut into those profits with a price cut? Sony did it within 6 months of launch because they were desperate for sales. And the lineup is very diverse - shooters, sports games, RPGs, driving games - even casual games.

Sony has to find a winning formula to make this race put them into the black ... 


 

I think your view of these two companies, as a whole, is a little skewed.

Over the last year, Sony’s stock as grown faster in value then Microsoft’s. Sony has had a rough few years, with things like exploding batteries, the PS3 launch, and the root kit fiasco.

Sony’s problems are behind them now. They have a very strong finical division, the PS3 is looking strong for the future, the OLED technology shows promise, and it looks like Blu-Ray stands to make them a fortune. As a whole, they have a positive looking 5 years ahead of them.

Microsoft on the other hand has a console that will most likely die outside of the US, an operating system that even Bill Gates has publicly criticized, and Apple breathing down their throats with about 10% of the market share in the PC world (and growing). They also all but destroyed MS’s handheld market with the iPhone.

Other then the applications department at MS, everything they do is in jeopardy. I would not look at them right now as some unstoppable force with unlimited resources.

22% of the fortune 500 companies from 5 years ago don’t exist anymore. No company is safe from failure. Not even Microsoft.

 



Just_Ben on 18 January 2008
starcraft said:

We now know that Microsoft did extremely well in 2007, however they could have done better. It's fair to expect that the low-end 360 will start getting down towards mass-market prices towards the end of 2008, so now its time to call price drops.

 

When will Microsoft drop the price?

How much will the drop be for each SKU?

Will Sony follow with the same price drop for the PS3?

Does anyone have an educated guess as too how much Microsoft are clearing on each 360 sold?


End of q2/begin of q3.

Most likley only $50/€100

Sony will do it before MS.

about 20-50$ I guess, if you DON't count RROD. 



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madskillz on 18 January 2008

@ MrMafoo

I just have one question - if Sony is in such good financial shape, then why did they sell its chip making division off? The PS3 brand has drained the PS1 and PS2's profit in little more than a year. While Sony may be thriving, their gaming division is hurting.

I never, ever said MS was flawless - but their mistakes are minimal. And the 360 will die outside of the U.S.? When do you see this happening? The console was selling before the PS3 launch, it's still selling now, and will sell even more when MS cuts the price a bit. I see Sony losing more just from the standpoint of having to stop a lower-priced competitor. At this rate, the PS3 will take years to overcome the 360. And as I stated earlier, the 360 isn't the Xbox, and to think the 360 will fail like the Xbox is insane. Just look at the numbers - WW - and see one thing - if they figured out Japan, the 360 would be leading the PS3 totally.

All you have to do is keep watching the charts. The PS3 is really just running a wii bit ahead of the 360 WW ... domination is not on the horizon ...



Legend11 on 18 January 2008

I guess we'll find out when they each release their quarterly report which one is in better shape for a $50 price drop.



madskillz on 18 January 2008
Legend11 said:
I guess we'll find out when they each release their quarterly report which one is in better shape for a $50 price drop.

You're correct, Legend. Aren't the reports just a week away?