|Mr Puggsly said:
There are no doubt a tonne of consumers, young and old, who are dying to get their hands on a PS4, but they just can't afford anything more than $249 or $199. That's also another reason why the PS3 was only able to sell as many units as it did, because it never really got cheap enough to cater to the cash strapped audience. By hitting a $50 to $100 cheaper entry point, PS4 could capture anywhere from 10-50 million more consumers by it's EOL. This also doesn't take into account the flat out super late adopters, SKU replacers, upgraders and collectors, competition switchers and PS exclusive justifiers, etc.
Even if PS could only get the manufacturing costs down to $249, it should be worth it to sell PS4 for $199 and take the $50 loss. Not only would your console be affordable to a whole new market of buyers, but it would have an absolutely massive library with many must have games. GOW for example, which would likely be down to $20 physical at that point in time and part of the greatest hits. Software is where the money is made, and subsidizing $50 means by the purchase of the third game, PS is making money. Most of these customers, especially the younger audience, ends up being a gamer to some degree, who will likely be partially swayed to purchase a SNY product in the future.
There is another side to this however in terms of profit and membership. Consumers who are forced to wait for a $199 model, likely don't have great internet, if they have high speed at all. This means it's more unlikely they will be buying from the PS Store, paying for PS Plus, and no online play means no spending money on MTX. It also means it's more likely they are going to buy less, cheaper games, and finally, they won't really be tied much into the ecosystem, aside from future hardware BC, so they very well could jump ship next gen, especially if the competition has the lowest priced hardware.
Same goes for XB for the most part, especially with it's push of affordable services. The only big difference I see there is that XB likely wants to put this gen behind them, so pushing their "One" branded hardware may not be the best idea. The fact that the SAD edition is what it is overall, makes me wonder whether MS thinks this as well, and is looking to progress stating next gen with a fresh proper start. If there is truth to this, it's all the more reason for PS to push for a super cheap PS4, so that these customers will hopefully prefer to buy a PS5 when the time comes in the future.
The PS3 and 360 sales dropped like a rock once 8th gen consoles came. 2013 sales were actually good even with a big decline. After that though, it dropped fast.
While I totally get your logic but it didn't happen last gen and thus far Sony and MS have been unwilling to do significant price cuts on 8th gen hardware. Think about it, 8th gen consoles haven't gone down much since 2013, officially. Maybe they rely on the used market instead of selling hardware at a low price.
I don't have the stats to prove it, but its very possible people get rid of their old hardware whether by giving it away or selling it. New consoles with BC could encourage that. So that means less need to sell dirt cheap hardware on the market, which never happened with PS3 and 360 officially.
I get the impression there simply isn't that much money in previous gen hardware. As you suggest maybe that market is less willing to buy $60 games and buy subscriptions. If Sony and MS does make $299 consoles at the beginning of the 9th gen, that's evidence they really want people to upgrade. Regardless, I imagine 8th gen support will continue because people will stick with old consoles for a few years.
Personally I'm happy with my X1X units. I also imagine X1X is gonna get great ports for a few years. I might be a person that doesn't feel the need to upgrade quickly.
Well I think PS2 would be the example to use with it's insanely cheap prices and longevity in the market partially because of that. I would personally say that PS3 is somewhat similar to the XB1 situation in that PS likely wanted to move on and leave the PS3 ecosystem and as many of it's troubles behind, as quickly as possible. At the very least, overshadowing it heavily with a PS4 laser focus. Will PS5 be just $399, or $499?
Part of the reason PS4 is as expensive as it is, is because it's still selling strong enough that PS see's no reason to drop the price. You don't fix problems that haven't come to pass yet. XB1 is selling for much less, with big bundles, and it's still not selling anywhere near PS4 numbers, so why would PS drop the price just yet? Now PS4 sales numbers are starting to show signs of weakness, so a PS4 SS this holiday with a price cut makes a lot of sense. It should have an entire year on the market before PS5 hits shelves, and will go toe to toe with XB1S(ADE) pricing if MS doesn't update that hardware.
I'm sure some people pass on their old hardware, and there is no doubt a second hand market for last gen consoles, but that clearly only covers a portion of the audience. There are definitely buyers who still want a warranty, something you don't get with an older second hand unit. If you finally save all that money and blow it on a used model and it craps out a couple months later you're screwed. Think about all the second hand 360 owners who paid the price and faced the RROD, and well as some of the OG PS3's.
The $199 market today surely isn't the money maker the $299 and $349 market has been, but it's not just about the money, especially this late in the gen, going into the next. As for PS I wouldn't be so sure about upgrading. If PS was planning on a single SKU, or multiple with minor storage differences, and they felt strongly the MS multi performance SKU leaks were likely to happen, they very well could change plans and have a cheaper model as well. Maybe, maybe not. It could be simply to keep MS from having the entire affordable next gen market to themselves. Now even if PS did plan a cheaper SKU from the start as well, they can hope for people to upgrade all they want, if you can only afford $199 period, a $299 model doesn't help now or for the next few years.
While they've sold plenty of XB1X models, they may even end up somewhat of a rarity if XB drops a low end SKU next gen. I would have to imagine MS will just end XB1X production altogether by next gen launch at the latest. Whether the SKU is 4TF or 6TF, XB1X wouldn't be necessary anymore. The ports for it will be interesting assuming that even though it's GPU will be capable enough, how much will the CPU's differ? It shouldn't matter too much anyway since PS4 and Pro should get strong support for a couple years, which means anything jaguar related shouldn't be too much of a problem for the first while.