kowenicki said:
So did you say this back then? Of course not.
|
Actually i've always been outspoken in regards to the losses on any console, PS3 included. As a business you should be making money. Losing money to boost sales isn't good especially if you're in the financial position Sony is in.
| Shadow1980 said: Throughout the history of consoles, the biggest and most long-lasting boosts to sales were due to price cuts. Whereas individual games rarely help for more than a few weeks (and I do mean rarely, as in once a generation at best), price cuts often give sizable boosts to sales lasting many months on end. Therefore, I think a cut to $300 will boost the XBO's sales considerably. Of course, I would also expect the PS4 to receive the same price cut at about the same time, and it too will likely receive an substantial boost to sales. |
Those price cuts don't come within the first few months though. Price cuts boost sales for months after the console has been released to provide longevity. A $200 price cut in the first year is not going to be the long lasting steady boost a new console needs. They have already reduced the price once and cutting another hundred dollars already makes the product look bad and gives the middle finger to those few who already bought one.
Besides, I don't think a price cut to 299 would happen very soon! A price cut to 199 is DEFINITELY out of the question though! 
---Member of the official Squeezol Fanclub---
Shadow1980 said:
Actually, price cuts can and do happen quite early in a system's life. The PS1 was barely selling above Wii U levels in the U.S. from January through early 1996, but a price cut some time in May significantly boosted sales and it kept its improved baseline through August of 1997. N64 had a price cut in March 1997, which is very early, too early to tell how it would have done that year at $200 instead of $150, but it did sell very well. The Xbox and GameCube both received price cuts in Q2 2002 that had signficant positive effects on sales. The PS3 had a "pseudo-price cut" in July 2007 that gave a decent boost to sales (at least as compared to its terrible Q2), and had what could be considered its first "true" price cut (as opposed to just reshuffling of SKUs) about a year after launch, which resulting in much stronger sales throughout 2008. Of course, the 360 had its first price cut in 2007 and the PS2 had its first in 2002, both system's second full calendar year. I suspect both the XBO and PS4 will get their first price cuts next year, which is of course their second full calendar year as well. In the case of the XBO, it will be a "true" price cut. The XBO may go for $400 now, but that's only because Kinect was unbundled; MS did not actually institute a price cut. It's really not much different than Sony reshuffling their SKUs in 2007 (basically bumping up hard drive sizes for the $500 & $600 SKUs) before finally having a SKU that cost $400 instead of $500 or $600 released in November. It didn't hurt Sony, and as mentioned it actually helped, so I don't see any reason why slashing the Kinect-less XBO to $300 next year won't help as well. |
I still don't think it'll make a huge difference the same way the kinectless version didn't. Price isn't the problem with the X1. Its the overall consumer perception of the product. MS pretty much shot themselves right out of the gate. People see the PS4 as the better console (and rightfully so in my opinion) and PlayStation has a reputation for having fantastic game libraries throughout each generation and 2015 looks like a very strong year for Sony. I don't think a simple price cut is going to make the X1 outsell the PS4 for a few months let alone as long as it would need to actually pass it. Its going to take time for the consumer perception of the X1 to change meanwhile PS4 will keep dominating the market in a huge way.
Two things have drastically changed from last generation that will make it harder for XOne to make a comeback in NA:
a. Multiplatform games run better on PS4. This is big IMO as the Playstation brand is known for the diversity of it's exclusives as well as the quality. The latter won't change in public minds but without the better multiplats, it would be hard for the average consumer to choose XOne over PS even with a cheaper price. The introduction of Kinect (and all the empty promises with it) definitely extended the longevity of the 360 but their core audience was alienated. PS3 for example from 2010 - 2013 had great games coming out month after month, what did the 360 have?
b. the online infrastructure for PSN has been vastly improved. It might not be better then Live but it has closed the gap significantly. Now with more people choosing the PS4 & with both companies charging for online, the majority of people will get what their friends have, and that is..
All in all the lowest selling PS console will finish with over 90+ million shipped. No way XOne takes NA back even with a price cut or Halo/ Gears unless Sony shoots themselves in the foot again.
Shadow1980 said:
While MS probably did hurt their reputation because of the PR debacles of last spring, I have my doubts that this will have a lasting impact. Most early adopters are likely more dedicated gamers who are higher-information voters. However, there are at least 70 million households in the U.S. alone that own at least one seventh-gen console, and there's a good chance that most of them will at some point buy an eighth-gen console. Many if not most of these people are lower-information consumers, e.g., gamers who don't have ready access to the internet (and considering print periodicals for games are dead...), gamers who for other reasons such as lack of time due to their job and/or kids don't spend any time perusing gaming websites, little kids who don't understand anything about DRM, consumer rights, or the First-sale doctrine and whose parents (who are the suppliers of said kid's games) don't know and don't care either. Most consumers are probably going to know everything they do based on what they see on TV ads or hear from retail clerks. |
The XB1 is even less likely to win over the 'lower information' consumer than the hardcore early adopter types. The hardcore are more often fervent brand-loyalists (just look at the XB1 launch vs. XB1 2014 numbers to see evidence of that).
But you have to ask yourself in a world of twitter, facebook, social media, groups of casual gamers, etc, that when the $299 days come (and face it, Sony will closely match the XB1's price unless it becomes a firesale item, something that MS would never allow unless they shit-can the project entirely) .. people want to buy the 'winner'. That's how the 360 got into the leading role in the US market and the PS3 never really was very relevant here. The PS3 wasn't prohibitively expensive for all that long compared to any decent 360 SKU. By the time the mass consumers were buying 360s and PS3s (2009-2013 years), a decent 360 was similarly priced to the PS3, but the 360 absolutely DESTROYED the PS3 in sales. That early lead, that reputation for being the best place to play games .. it made all the difference.
Word of mouth on XB1 is always going to be sort of muddy unless something spectacular happens. Otherwise the $299 price point for 8g PS4/XB1 is simply going to accelerate what's already happening. Another thing to consider is that by 2015, the most likely time for $299 to become a reality, the PS4 library will REALLY start to get fleshed out. We won't see major droughts of titles, it's just going to be hit after hit (and 90% of titles being available on both anyway).
Alea iacta es
The XBO still has a pretty bad reputation in the public eye from the original reveal, so I doubt the effectiveness of a pricecut unless the console gets better rep in the future.
vivster said:
First because MS is doing great despite it. Second because Xbox furthers Microsoft's brand. If they cut off the Xbox division they will see lower revenues in other branches as well. |
He's asking about investors. Low margin or losing areas brings down the rev/cost ratio which much of the stock market pricing is built upon.
theprof00 said:
He's asking about investors. Low margin or losing areas brings down the rev/cost ratio which much of the stock market pricing is built upon. |
This is an important detail honestly. There are always internal politics at play with decisions of this magnitude.
First off, Xbox is a bit player inside Microsoft, but anything that includes budgeting in the billions gets a LOT of scrutiny. It's easy to see where the arguments ran historically :
OG Xbox : "Okay, we need to make this investment to secure a foothold in the living room because competitors may eventually threaten us from that vector" "We WILL lose money on this, but it's worth it and will pay off eventually"
X360 Prelaunch "Okay, we've built the brand, and can go mass market with this one. Initial expenses will be high, but we should reach profitability and maybe even cover the OG Xbox losses with this puppy!"
X1 Prelaunch "YES! We've succeeded in dominating the US market and getting a sizable foothold abroad. If we can increase per-unit profitability by introducing new paywalls and used game controls, and grow our market share even more, we will be SWIMMING in money! 1 BILLION CONSOLES!!!!11111oneoneone"
X1 Post-launch "Uhhh, well .. we had to strip all the profit moneywall vectors from our system, we had to dump the 'integral' Kinect, we've utterly lost Europe, we're losing the US .. we're not on track to cover R&D for a while yet guys"
So basically, anyone in Xbox group that wants a big price cut would have to get it cleared from on high, and the reasoning to do so now gets pretty thin. A price cut would almost certainly be met with a response by Sony, neutralizing the effect, and losing money in the process.
Choice A : Do not cut the price, keep the XB1 revenue neutral on a per-unit basis, ride it into the ground, and scuttle the brand at EOL.
Choice B : Get aggressive, cut the price, if Sony cuts, CUT AGAIN, try to claw out a relevant market share once more, and hope for better results Gen9.
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