I didn't do much more than late high school economics and one of the topics covered was the substitution effect. Where goods that were seen as substitutes or interchangable if one of them lowered in price it would see an increase in sales and the other a decrease in sales. Since the PS3 and Xbox360 are pretty much interchangeable to most people, will we see any corresponding drop in PS3 sales in the U.S to coincide with the Xbox360 price drop as people substitute one for the other?

Im not calling them perfect substitutes like say two identical brands of peanut butter, but surely since one is now relatively cheaper than the other those who are looking at the type of experience offered on both systems would consider the Xbox360 to be a stronger contender for their dollar and some will substitute it in place of the PS3.

If this is true, then wouldn't we actually see a dip in PS3 sales to coincide with any increase for the Xbox360? Obviously its not a perfect interchange but there must be somewhat an effect here. If this is true we would also expect that there be a decrease in the demand for the Wii as well, although I don't believe they are even nearly as close a substitute as the PS3 and Xbox360.

This has nothing to do with hardcore Sony fans or those who consider blu ray to be a top priority, im talking about people on the margins. Its those people who makes posts like "Xbox360 or PS3" and it seems to encompass a decent quantity of people. Because even a 5% swing from one to the other would surely be noticeable on the charts? That would make an overall 10% difference in sales or about a 6,000 unit gap instantly in the charts.

So is this plausible?

You really want the PS3 to die man.   eeeh.

To your comment though, I think the Playstation 3 will have a dedicated fanbase irregardless.  I think with the exclusives coming out, the system will show that it has a lineup that is worth looking at.  I think, honestly, people are waiting for the PS3 to go down to 299.99 moreso than they are the 360.

No

You are very correct my friend.

Yes we probably would see a drop in PS3 sales and a big upsurge in 360 sales, but do you really think that Sony would just sit idle and not do anything about the price cut? They will probably cut prices themselves after a couple of months once they can get everything in gear. So I really think that it is pretty much going to be a given for a $50 price cut w/ the 360/PS3 but am also wondering whether this will force the Wii to slash prices as well

I honestly, disagree, with alot of you guys. I think there is a market for both systems. The hardcore will buy both systems if they are at reasonable prices. I think each system offers something different, and the market will come and play to their stregnths.

I think the 360 sales will rise the first few months than level off.  Same if PS3 did a huge sale.  It all matters on content.  So far, the family friendly, universal content is nonexistant.  There is a reason Wii sales upsurge.  You would be surprised at how many Wii owners are dissapointed in the Nintendo, however, the content is still there to bring your girlfriend, best friend, and grandmother to play in one room.

Yup

You were doing so good too. Especially your sig. I don't think this will help though.

@OT Maybe, but I don't think it would help it that much. The 360 is already cheaper than the ps3 and people still buy the ps3 more.

The intelligence of this community sometimes baffles me. There are these alarmists threads with doom and gloom, FUD, and hysteria BLANKETED behind clever words. 

The problem the 360 and PS3 have is that they are both reaching for the SAME consumer.

Each console has its own strength-

The 360 has Live,

The PS3 has Bluray.

Those positives negate each other. So the next thing you have is games. 99% of games are multiplatform, and the exclusives 360 has can be offset by exclusives PS3 has- and taste in games - is just that, an opinion.

They are canceling each other out. If I was a betting man, I'd add both PS3 and 360 sales and than compare that number to the Wii. That would prove hardcore gaming isn't dead.


THAT WITHSAID,

I still think a vast majority of people, even current 360 owners are waiting for a PS3 price drop. Somehow, even the most die hard 360 fan, will have a hard time resisting a 299.99 PS3, with free online, bluray, Little Big Planet, Final Fantasy, and God of War.

Same as a PS3 fan is having a hard tme resisting, Halo, Mass Effect, and Bioshock.