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Forums - Sales - XBOX360 price cut in OTHERS= increase 30k units = -10M$$ week =good or bad?

kylw on 14 April 2008

XBOX360 has been selling 75k+week in others since the 100 euros price cut. That means that their revenue went down 75k*100euros= 7.5MEuros. Is an increase of 30k units worth losing 10M$$+ week in revenues?


Let me know your thoughts

EDIT: instead of revenue I meant profit (excuse me my bad english)



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NJ5 on 14 April 2008

If it means that they're stealing some sales from Sony (especially when GTA4 launches), and if they're breaking even or not losing much money in hardware sales, I think it's a good strategy. Microsoft needs to create a brand name in Europe, as Sony has done in the past 10+ years.



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Ajax on 14 April 2008

when was the date of the 100 EURO price reduction?
wasn't there a 50 EURO price reduction a couple weeks ago?

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Million on 14 April 2008

I think this price cut had the effect of keeping the 360 relevant in europe through it's low price point , it was definetley worth the loss .




Joeykanga on 14 April 2008

Micro$oft is doing everything in Europe.



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tombi123 on 14 April 2008

The 360 was selling roughly 45K a week before the price cut. So 45000*350=15.75M Euro's. Now it is selling 75K a week. 75000*250=18.75M Euro's.

Microsoft has actually increased revenue by 3M Euros due to the price cut. (That is if I got the prices right).



Legend11 on 14 April 2008
kylw said:

XBOX360 has been selling 75k+week in others since the 100 euros price cut. That means that their revenue went down 75k*100euros= 7.5MEuros. Is an increase of 30k units worth losing 10M$$+ week in revenues?


Let me know your thoughts



Are they really losing 10 million/week in potential revenue though? The only way that number is correct is if they would have had the exact same number of sales per week even without a price cut.

Also the increase in sales represent more potential Xbox Live Gold subscribers, more people to buy first and second party games, more reasons for third parties to make games for the system, etc.



libellule on 14 April 2008

I dont know how much they lose/win.

But 75k/week ???

we are only 1 month away from the price cut AND there was easter eggs just 2 weeks ago (since we still dont have results for last week) ...

Let's wait tomorrow to see how the sales behave.



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Million on 14 April 2008
tombi123 said:
The 360 was selling roughly 45K a week before the price cut. So 45000*350=15.75M Euro's. Now it is selling 75K a week. 75000*250=18.75M Euro's.

Microsoft has actually increased revenue by 3M Euros due to the price cut. (That is if I got the prices right).

 Increase in revenue means nothing , the price cut means they're making less money of hardware ,deccrease in profitability(depending on what SKU actualy when up in demand , likely to be the arcade)

 They could recoup losses through software however.

 

@Legend11 , they coulda been loosing alot more with the 1st of the PS3's big exclusives being release (GT5:P) , and with the release of GTA IV , europe traditionaly like PS3 games and recognise GTA as being synonymous to the playsation brand , the XBOX price cut serves as a huge influence on this however. 




tombi123 on 14 April 2008

@Million

The OP pacifically talks about revenue.