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Forums - Microsoft - Analyst: Microsoft Could Use Price as a Weapon

Million on 02 July 2008
smbu2000 said:
Loud_Hot_White_Box said:
scat398 said:
Price is a huge advantage for the 360 especially in NA where consumers shop without bias. A $50 price drop will keep MS well ahead of Sony in NA for the rest of this year.

Price drops in areas where consumers hold a heavy bias against you won't help as much, but in Europe it's helped, especially in the UK it's helped keep Microsoft on even footing.

 

It's not that consumers shop without bias here, it's that they don't care as much about evidence of hardware quality.

Hey, what's wrong with that 360 button in the pic in the OP?  I've never seen one with 4 green lights.

Sony should go balls to the wall and drop to $299/$399 for two models, realizing they are going to increase install base and profit long term.  MS couldn't stand up to a $299 PS3.

You do realize that a price cut like that would literally kill any chance of profitability for Sony's game department(also any chance of the PS3 actually realizing a profit at all). While MS is making money off of the 360, so a price cut is acceptable for them, Sony is still losing money on the PS3 and a price cut would cause them to lose a boatload more on it.

 

 

That's not entirley true , it's really down to how fast Sony are able to reduce the price of the console , we know for certain Sony are going to be cutting the costs of the PS3 in fall with a reduction in component sizes. The more frequently they are able to reduce price , the more Sony is likely to be able to offer a price drop.




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Rock_on_2008 on 02 July 2008

Price is a desperate effort to try and boost the lagging sales of the X360. X360 has very few exclusive games coming out. PS3 has the best list for remainder of 2008 and beyond. X360 has very slim line up in 2009. What games? ......... exactly.



obieslut on 02 July 2008

i think it will steal from the Wii not so much the ps3



smbu2000 on 02 July 2008

Not sure if this was posted already, but...

http://kotaku.com/5021252/pachter-rumored-xbox-360-price-feature-set-sprucing-could-squeeze-sony

Evidence suggests that the mid-level Xbox 360 might soon see a price drop to $299, and we've seen rumors suggesting that the imminent cut would make way for a new, 60GB Xbox 360.

With price cuts possibly on the horizon that could bring console prices closer to the Wii's territory, should Nintendo worry? "The Wii audience is not choosing between 360 and Wii," said Wedbush Morgan analyst Michael Pachter. "Either they will buy a Wii only, or they will buy both a Wii and either a 360 or PS3. So Microsoft is right to consider the PS3 as the competition and to ignore the Wii."

Sony is the one, says Pachter, with more to be concerned about regarding possible pricing and feature set changes for the Xbox 360:

"Consumers see two boxes with very similar game experiences, and have to decide if a 360 with a 20Gb HDD, no Internet adapter, a very well-thought out Live experience and an extraordinary game library is a better deal at $349 (or $299) than a PS3 with built-in Internet adapter, a 40Gb HDD, a Blu-ray disc drive, a weak online experience and a relatively thin library of games for $399," said Pachter.

Both Sony and Microsoft unsurprisingly declined to comment on rumors or on their future price strategy.

Said Pachter, "So far, Americans consider the value proposition a toss-up, while Europeans value the PS3 more. Lower pricing and/or enhanced features for the 360 could change that."




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Galaki on 02 July 2008

Last I checked, there are 3 home consoles this gen. It's just the battle of Xbox 360 vs. PS3 now?



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Rock_on_2008 on 02 July 2008
Galaki said:
Last I checked, there are 3 home consoles this gen. It's just the battle of Xbox 360 vs. PS3 now?

 

The fanboys count the Wii as last gen it is up against the PS2. PS2 is well ahead of the Wii. Do not argue with us it will just make us angry. Beware the fanboy nerds.



madskillz on 03 July 2008
smbu2000 said:

Not sure if this was posted already, but...

http://kotaku.com/5021252/pachter-rumored-xbox-360-price-feature-set-sprucing-could-squeeze-sony

Evidence suggests that the mid-level Xbox 360 might soon see a price drop to $299, and we've seen rumors suggesting that the imminent cut would make way for a new, 60GB Xbox 360.

With price cuts possibly on the horizon that could bring console prices closer to the Wii's territory, should Nintendo worry? "The Wii audience is not choosing between 360 and Wii," said Wedbush Morgan analyst Michael Pachter. "Either they will buy a Wii only, or they will buy both a Wii and either a 360 or PS3. So Microsoft is right to consider the PS3 as the competition and to ignore the Wii."

Sony is the one, says Pachter, with more to be concerned about regarding possible pricing and feature set changes for the Xbox 360:

"Consumers see two boxes with very similar game experiences, and have to decide if a 360 with a 20Gb HDD, no Internet adapter, a very well-thought out Live experience and an extraordinary game library is a better deal at $349 (or $299) than a PS3 with built-in Internet adapter, a 40Gb HDD, a Blu-ray disc drive, a weak online experience and a relatively thin library of games for $399," said Pachter.

Both Sony and Microsoft unsurprisingly declined to comment on rumors or on their future price strategy.

Said Pachter, "So far, Americans consider the value proposition a toss-up, while Europeans value the PS3 more. Lower pricing and/or enhanced features for the 360 could change that."

I usually don't agree with Pachter, but this time I will. QFT.

 



Reasonable on 03 July 2008

The most basic competitive weapon for any merchandise sold at retail is price - way to go analysts for catching on to this amazing fact!



Try to be reasonable... its easier than you think...

Alby_da_Wolf on 03 July 2008
smbu2000 said:
Loud_Hot_White_Box said:
scat398 said:
Price is a huge advantage for the 360 especially in NA where consumers shop without bias. A $50 price drop will keep MS well ahead of Sony in NA for the rest of this year.

Price drops in areas where consumers hold a heavy bias against you won't help as much, but in Europe it's helped, especially in the UK it's helped keep Microsoft on even footing.

 

It's not that consumers shop without bias here, it's that they don't care as much about evidence of hardware quality.

Hey, what's wrong with that 360 button in the pic in the OP?  I've never seen one with 4 green lights.

Sony should go balls to the wall and drop to $299/$399 for two models, realizing they are going to increase install base and profit long term.  MS couldn't stand up to a $299 PS3.

You do realize that a price cut like that would literally kill any chance of profitability for Sony's game department(also any chance of the PS3 actually realizing a profit at all). While MS is making money off of the 360, so a price cut is acceptable for them, Sony is still losing money on the PS3 and a price cut would cause them to lose a boatload more on it.

 

It looks like you think cost reductions and royalties revenue increase proportional to HW base and number of titles growth happen only to XB360. I'll reveal you a secret: they happen to Wii and PS3 too  

 



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Aj_habfan on 03 July 2008

I don't see how the Pro price drop would make that big of a difference, as the least and most expensive models are still the same.