Situation

The is Xbox360 down 70k now, and the next 3 weeks before the price cut will probably favour the PS3 so I expect the Xbox360 will be down by about 140k before the pricecut comes into effect on the 7th.

I will assume that the Xbox360 will be outsold by the PS3 by 25k in the Others and Japan regions and this difference must be countered by the Xbox360 outselling the PS3 in the Americas with this price cut.

I will assume that the PS3 would sell 60k units per week and the Xbox360 would have sold 70k per week given the past advantages of the Xbox360 in the Americas region had a pricecut not come into effect.

The Xbox360 to make up for the differences between the other regions and the Americas and the past gains by the PS3 this quarter the Xbox360 will need to outsell the PS3 by 50k per week or given this example the sales will need to increase to 110,000 per week whilst the PS3 sales would have to maintain a steady level at 60k per week.

Estimating the Xbox360 sales increase.

Old pricing of SKUs.

• Arcade $280
• Premium $350
• Elite $450

New pricing of SKUs

• Arcade $200
• Premium $280
• Elite $400

I am going to apply the principle of price elasticity at the most basic level. It means that when you decrease the price of something that is price elastic/price neutral you would expect an increase in overall revenue or the revenue to stay the same.

For my example I will assume that all Xbox360s sold are Premiums.

70,000 consoles sold at a price of $350 is my example, if the price decreases by 15% (to $300), demand will also increase by 15% (80,500) if demand is neither elastic or inelastic.

If the Xbox360 has an elasticity of 1.5 (Moderately elastic) then demand will increase by 22.5% when the price is reduced by 15% or roughly 15,000 consoles.

This is what I think will happen.

If the average selling price before the pricecut was $370 given that there would be a greater percentage of Elite units sold and the Arcade was unpopular, I would expect that the Arcade and Premium units would gain popularity relative to the Elite (Due to the HDD size difference) and the Arcade will gain in popularity compared to the Premium since its recieving the biggest price cut I am assuming an average selling price of $270 after the pricecut, a 37% decrease in price.

If the decrease in average selling price is 37% and the price elasticity is 1.5 then the Xbox360 will sell about 108,000 per week in the U.S after the price cut.

Conclusion

Theres about a 50/50 chance that the Xbox360 will take an overall sales lead for this quarter with the price cut in my view.

Sure it will but how many i am not sure

I still don't think it will but who knows.

Also isn't the premium's price supposed to be dropped to 300 not 280...

In their financials? No.

In sales? I doubt it.

oh i thought it was going to be 360 will win because this this and this, i am glad you have lowered your expectations.

Assuming Sony does nothing in terms of price cut. In NA, MS will shine especially later on, but others ps3 will rule and make up the deference. All Sony has to do is cut the price in EUROPE.

PS3 will make the difference up in Others for the sales in America.

PS3 will win this quarter in sales. And definitely financials if this price drop is true.

No, the 360 never stood a chance. I can't understand why you ever thought it would...

it will be close..... hope not

So much 360 hate here; I wonder what it ever did to them. All mine ever did was take a lot of spare time away from me.

This quarter will be tough though I think, as the clearance price effect is largely over and the actual reduced prices come late in the quarter. I'd expect 4th quarter to be better for the 360 for two reasons: price effect and the eventual bungie announcement. I also wonder what effect the dashboard update will have on the general populace. On the one hand they may not even KNOW about it...on the other, it could have "casual" appeal.