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Forums - Sales - February 2015 NPD Thread! 3DS: 395k, PS4: 342k, XBO: 276k, WiiU: 96k

Barkley on 13 March 2015
Intrinsic said:

Just get this, the only thing that could stop or delay Sony from dropping the price is if from their internal projections they realize they wouldn't be able to meet demand. 

This is ultimately not about making more from each console unit sold, or about "selling more" than the XB1, its about increasing your user base as quickly as possible. Look at it this way, If Sony sells 15M PS4s this year at $400 or 20M if they drop the price to $300 at some point, those extra 5M gives their overall user base a massive boost. Those are 5M more people to sell games to or buy PS+ sub's. Basically, they stand more to gain getting as many consoles out there rather than making a profit on each console sold but selling less of them. 


Exactly, the higher the difference in userbase between the ps4 and it's competition the more advantages the ps4 gets.

Lead platform for game development.

Higher third party support. (More likely to get third party exclusives due to high marketshare and less likely to miss third party titles for the same reason. Indies also more likely which has been very apparent this generation so far.)

Higher software sales. (Dollar dollar for sony and again this increases the importance of the ps4 over other consoles to third party.)

PS+ Subs. (dollar dollar again)

More desirable due to friends owning the console, meaning even more console sales.

 

If you fall behind your competition it's very difficult to catch up.



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ivanthebike on 13 March 2015

Pstv over 30k
Psvita under 30k
That's weird!



Barkley on 13 March 2015
ivanthebike said:
Pstv over 30k
Psvita under 30k
Is pstv selling better...why?

Pstv is $71 or $94 with controller on amazon atm.

Vita is $195.

PSTV is better if you just want to remoteplay your ps4 on another tv.



JoeAncelotti on 13 March 2015

So they were all undertacked. Nice to know that they sold more than we thought!



Add me on Xbox: DWTKarma 

man-bear-pig on 13 March 2015

WiiU and 3DS tracked well. ioi got the % for PS4 vs Xbone right but the numbers wrong. Good job VGC



My prediction threads:

Wii U will sell under 40m units (made on 14th September 2012)

PS Vita will sell under 20m units (made on 30th September 2012)

Wii U will sell under 7m in 2013 - I was right

Halo 4 first 9 weeks sales prediction

PS4 to be down YOY in 2015

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SWORDF1SH on 13 March 2015
Intrinsic said:
Hanswurst02 said:

yeah sure. But why lower the price when they can sell the same and get more money from it?

They only HAVE to lower the price if xbox is selling significantly more which they dont. 

Just get this, the only thing that could stop or delay Sony from dropping the price is if from their internal projections they realize they wouldn't be able to meet demand. 

This is ultimately not about making more from each console unit sold, or about "selling more" than the XB1, its about increasing your user base as quickly as possible. Look at it this way, If Sony sells 15M PS4s this year at $400 or 20M if they drop the price to $300 at some point, those extra 5M gives their overall user base a massive boost. Those are 5M more people to sell games to or buy PS+ sub's. Basically, they stand more to gain getting as many consoles out there rather than making a profit on each console sold but selling less of them. 

Of course install base is important but thet have to find that balance.

Using your example (I know it's a very loose example) and persuming they make $50 on each console (probably not, maybe more)

15M at $400 with $50 profit = $750M profit

20M at $350 with no profit = $0 profit

20M at $300 with $50 loss = $1B loss

So by having a $100 price cut they would have to make back $1.75B. So in this case it wouldn't be smart to drop price. PS Plus and software sales will never sell enough to make the difference up.

Again these are very very rough figures but the outcome is always the same. Sell less at higher profit or more for less profit but you will only want to cut price if the end results means making more profit.



kopstudent89 on 13 March 2015

Oh wow great numbers across the board! 3DS dominating the month

It's now way ahead YoY and hopefully it can carry that over the next two months.



globalisateur on 13 March 2015

What about PS3 and X360? Have we got numbers?



ReimTime on 13 March 2015
SWORDF1SH said:
Intrinsic said:

Just get this, the only thing that could stop or delay Sony from dropping the price is if from their internal projections they realize they wouldn't be able to meet demand. 

This is ultimately not about making more from each console unit sold, or about "selling more" than the XB1, its about increasing your user base as quickly as possible. Look at it this way, If Sony sells 15M PS4s this year at $400 or 20M if they drop the price to $300 at some point, those extra 5M gives their overall user base a massive boost. Those are 5M more people to sell games to or buy PS+ sub's. Basically, they stand more to gain getting as many consoles out there rather than making a profit on each console sold but selling less of them. 

Of course install base is important but thet have to find that balance.

Using your example (I know it's a very loose example) and persuming they make $50 on each console (probably not, maybe more)

15M at $400 with $50 profit = $750M profit

20M at $350 with no profit = $0 profit

20M at $300 with $50 loss = $1B loss

So by having a $100 price cut they would have to make back $1.75B. So in this case it wouldn't be smart to drop price. PS Plus and software sales will never sell enough to make the difference up.

Again these are very very rough figures but the outcome is always the same. Sell less at higher profit or more for less profit but you will only want to cut price if the end results means making more profit.

Yes but production costs fall as a console generation goes on. Materials become cheaper and manufacturing can always be placed more heavily on companies like Foxconn. I don't think they'd lose out too badly on a price cut, and I agree with intrinsic that an install base is very important



#1 Amb-ass-ador

Intrinsic on 13 March 2015
SWORDF1SH said:

Of course install base is important but thet have to find that balance.

Using your example (I know it's a very loose example) and persuming they make $50 on each console (probably not, maybe more)

15M at $400 with $50 profit = $750M profit

20M at $350 with no profit = $0 profit

20M at $300 with $50 loss = $1B loss

So by having a $100 price cut they would have to make back $1.75B. So in this case it wouldn't be smart to drop price. PS Plus and software sales will never sell enough to make the difference up.

Again these are very very rough figures but the outcome is always the same. Sell less at higher profit or more for less profit but you will only want to cut price if the end results means making more profit.

Well if you wanna be anal about it :), let's see...

What we know is that as of Feb last year Sony announced they were making a profit on hardware and went on to say that their focus is on market growth not hardware profitability. This suggests that they are willing to slash prices to increase market share rather than make as much as they can make from hardware. But let's do some loose math. 

 

  • At launch the PS4 BOM was ~$381 but extremely high demand meant they had to air freight shipments which would have resulted to a unit cost of over $400 for them. when demand stabilized, this problem goes away. 
  • As it stands, 15M@$400*$50 profit = $750M (this would meanthe BOM of PS4 is now at around $340 cause the retailer gets around $10-$20/console sold. 
  • By sept-dec, and to allow a price drop there will be a console internal revision, which would bring the BOM down to at least $320 or less. Remember Sony is a hardware company at heart, this is their thing, if anyone can get costs down by better engineered hardware its them. 
  • So 20M@$300*$30 loss= $600M loss in hardware. Yh, looks bad I know.
Now let's look at the benefits. 
  • Potential 38M-40M user base by end of 2015 as opposed to 33M-35M, basically around a 20% increase in potential user base.
  • That means, more games sold, more extra controllers bought, more PS+ subscriptions, more "obvious choice" third party support and benefits, harder for competitions to buy 3rd party support....etc
  • To put things in perspective, take two very popular 3rd party games for instance as a worst case scenario base; Next COD and MGS5. If those games sell 10M between them on a 40M install base (low balling it here) and Sony makes $15 per game sold, that's a profit of $150M. From just two games. 
  • If you extrapolate and take into consideration first party games, digital sales and all the other multiplatform games there, then you see the truth of the console "loss lewder" business model. There is more money to be made from taking a hit on hardware and selling more software. 
  • While Sony may lose $30 on every console they sell at $300, the business they get from every console sold comoketly negates that and gives them a profit overall. If a consumer buys a PS4 and then 2 games or a PS+ subscription, or one first party game, or an extra controller.... Sony has already broken even.