Forums - Sales Discussion - X360 Price Cut - Effect on MSFT financials - Analysis - With Actual Numbers

probably the cat will be similar to the one in Europe :
199 arcade
269 (299) pro
369 elite



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My guess on the effect:

4.5 million 360s to be sold in US before price drop (extrapolated for Source's article) Spetember to December 08

$350 average sale price of 360 before (assuming About 25% arcade, 25% elite, 50% pro)

$1.575 billion revenue

Assuming $199 Arcade $299 Pro and $399 Elite

$270 average sale price after (40% Arcade, 50% Pro, 10% Elite)

5.83 million 360s need to be sold to sustain revenue

30% Approximate sales improvement needed to sustain revenue

Profit is a different and much uglier story for MS.


And yes I realize I take a lot of liberties with my estimates but feel free to show me the real numbers if you have them.



Final* Word on Game Delays:

The game will not be any better or include more content then planned. Any commnets that say so are just PR hogwash to make you feel better for having to wait.

Delays are due to lack of proper resources, skill, or adequate planning by the developer.

Do be thankful that they have enough respect for you to delay the game and maintain its intended level of quality.

*naznatips is exempt

Even if they do sustain revenue with a 30% increase in sales, there cost is only going down slightly.

Yes I realize that Jasper is coming but they would have those saving per unit no matter what they were selling. They will make slightly more based on my prediction of a larger percentage of units being the slightly cheaper to make Arcade.

As for if the 360 will be sold at a loss or not I really can't say at this point. The consensus was that they were making money all year on the on the Pro and Elite at least. I am guessing the arcade was about break even with average console profit somewhere around $50. Now with Jasper and the slightly higher blend on harddrive free models they might drop their costs another $30. So at best I say breaking even or at an average cost of $270 per console.

This means they would have made $225 million for consoles in those 4 months with nothing changed and instead they will be making 0. But they were introducing Jasper either way so that would have been making $70 per unit.

So in my estimation this was a $315 million decision for Microsoft for this year. Most of that cost will be felt in the last quarter of this year. Increased holiday sales in that quarter of accesories and games should still mean a profit but a slim one as they have been narrowly profitable this year.

Ongoing costs of having a drop this year instead of waiting a year are probaly closer to $1 billion. But anyone who thinks that MS didn't make the right move probably thought 24 months was soon enough for the first price drop.



Final* Word on Game Delays:

The game will not be any better or include more content then planned. Any commnets that say so are just PR hogwash to make you feel better for having to wait.

Delays are due to lack of proper resources, skill, or adequate planning by the developer.

Do be thankful that they have enough respect for you to delay the game and maintain its intended level of quality.

*naznatips is exempt

@bumidan, the numbers that arstech had were

199 arcade
299 pro
399 elite



come play minecraft @  mcg.hansrotech.com

minecraft name: hansrotec

XBL name: Goddog

i'm in :)



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will make a worst case, average and best case scenario



Squilliam said:
bumidan - why don't you wait until someone gets a Jasper, opens it up and then you can do some research into how much they are saving on the silicon, and power supply/motherboard etc, and then do your analysis?

that would be helpful, but how long is that gonna take?

anyway, we can make reasonable assumptions about gross margins anyway.

did you have a chance to read my previous thread?

http://www.vgchartz.com/forum/thread.php?id=35336&start=0

Take a look at that and see if you have any suggestions, comments, etc.

If you see a mistake that you think, please let me know as well.

 



To all you guys who replied:

Numbers and analysis are up

New thread:
http://www.vgchartz.com/forum/thread.php?id=36558&start=0

check it out please, as per your request.

thanks.