am not in mood to read all of this.

Yes, that would be great squilliam
if u can have sources, i can definitely use it.

remember, i want to create a model that we can use to predict figures that are , by consensus, fairly realistic.

 is it much too much work? :)

ok can u tell me whats the story in simple way :P

Like a summary, a preamble or a conclusion that you can get the picture from without reading into a whole bunch of numbers you don't quite understand? xD

What does xD mean? it's some emoticon, but I don't quite get it.

I'm old.

@nnn2004

I did have a summary. It says: SUMMARY..
you can read that only if you want - for now.

basically, even cutting price, MSFT may still make $200 to $600 million, if they sell 12 million xbox, up from 8.7 million last fy.

Bumidan have to taken into consideration that Consoles are considered price elastic?

"The mean monthly price elasticity (i.e. averaged over the 89 months) for the videogame consolesestimated using our data is -3.680. This indicates considerable price sensitivity for these consoles"

http://209.85.141.104/search?q=cache:cNYYRDVQViQJ:faculty.chicagogsb.edu/pradeep.chintagunta/research/Forthcoming%2520Papers/JAE_VideogameConsoles.pdf+Price+elasticity+of+consoles&hl=en&ct=clnk&cd=5&gl=nz

That means that when the price decreases the total revenue from sales of consoles increase. So I think you assumption is flawed from that perspective. I forgot the maths but I think you should use some sort of elasticity formula to apply to your analysis. Then apply the increased expected revenue to plug into your accessorie/game/services formulas.

 i will read the summary later .... and whats this mean Squilliam xD ??

xD is a mexican smiley closed eyes wide open smile.

Yes, price elasticity is taken into account, in the sense that the projections are increased to 12 million.

To compare, Sony forecasts to sell 10 million PS3s.  In VGChartz estimations, PS3 has been selling slightly more than the 360.  Therefore, a forecast of 12 million is about 20% higher than the PS3s projections (granted they are not the exact same 12 month period, but only 1 quarter off).

As for accessories, I used the same attach rate 7.5 and 3.6 respectively for the whole lot.

However, you can argue that those rates should actually be lower, once higher volumes kick in.

For now, I will keep those attach rates, since changing them - will introduce another variation in the assumptions.  Right now, I don't want to change it.

Again, you are free to change those assumptions.  The table I have included gives you a good framework to plug in your own numbers.

Note: The paper, while interesting, is basically too complicated.  While it may be correct, the price elasticity is based on previous consoles, not current gen.  Hence, while some basis may be helpful, predicting using actual sales charts will probably not give a totally different predicted consoles sold.