Go look at the Xbox after its first ($300-$200) price drop, and GameCube's drop ($200-150).

Big difference, and destroys your "analysis".

Xbox was DOA in the US until the price drop. It dropped each month, and in April before the drop, was at 80,000 FOR THE MONTH. MS dropped the price, and it increased to 160,000 units/mo, and never ever dropped from there.

www.vgcharts.com has the info.

Summary: Price drops help weaker systems maintain some sort of decent sales, and can help sales maintain momentum, and make a poor selling console (ie, Xbox) sell better.

The problem is you're analyzing based on blocks of 3 months. it doesn't work like that. Towards the end of a given price cycle you will see the system at its lowest sales, at the beginning they are at their highest. So while over a year it may look like it's all the same, you're missing the fact that if they didn't cut the price the sales would have lowered.

Hell, based on the raw data you've presented it actually looks like PS2 sold worse at $179 than it did at $199, if that doesn't tell you there are more factors than what you've displayed there I dunno what does.

What the hell are you talking about?

http://www.vgchartz.com/hwcomps.php?cons1=XB&reg1=America&cons2=XB&reg2=America&cons3=XB&reg3=America&weekly=1

Am I seeing this wrong or are you just being obnoxious? As a mod and "rank #2" predictor I would expect more logic to your posts.

I have nothing if my "analysis " is wrong, if at least you provide proof to say it is wrong. I provided my claim with numbers that took forever to get from sony.

Regarding your summary: I agree. The point I am trying to make is that a price cut is not necassarily the way to go to increase sales, more factors are involved than the price. In my own opinion the games.

Agreed, that was the problem I had with the data from sony. I didn't say if they didn't cut the price sales would have lowere, just saying that with a price cut you might not necassarily get more units sold.

I was suprised too that it sold worse at 179$ than at 199, but hey it is not my data. I got it from Sony. 

I didn't have enough time to post, and my computer with h/w numbers is down. Thats why I sugguested you cross-refference actual monthly data on vgcharts.com (not this website) for monthly NPD data, rather than 3month shipped data. As already stated, it escews the data. And like others have said, price keeps momentum up on some systems (ie, PS2, NDS). And helps re-envigorate sales of lesser systems (see PSP's price drop. Sales have been up around 10k/wk since the drop. Hardly a coincidence). Nevertheless, I digress with charts. And again, as I said, price drops keep momentum for teh leading systems, and give a major boost for the smaller systems, as they then get a price advantage over the sales leader.

^ Estimated price revision reported at this time. Actual price drop was later in the month

* Only 2 months of avg. were used, as Nov would be the 3rd month, and drastically effect numbers.

Yes, I agree games drive systems, but if a system is overpriced, no good amount of games can save it. AS we can see from this chart, on average, every major price drop of 20% or more gave every system in question a significant boost in hardware sales, across the board. Grouped by % we get:

10% price drop (PS2, Xbox) = No Chg (Xbox increased 8%, PS2 decreased by 8%)

20-25% price drop (Xbox, GC, PS2, PSP) = 12.15% increase on avg.

30% Price drop (Xbox, GC, PS2) = 61.4.% increase on avg.

Now, with that kind of very decicive numbers on pricing. I tend to go with the notion that price drops DO make a difference, a big one. Halo2, FF games, and Zelda/Mario games will invariable move alot of systems too, but do NOT discount the price drops as being meaningless. If indeed they didn't matter, why would each company vie to lower prices? In the 2002 E3 example for all 3 systems, each system had a spectacular boost. It's not like one company cut into another companies sales, as they all increased. Likewise, with the 20-25% increases, each saw a moderate gain.

There sir, is your proof. I will add DS numbers with their price revisions shortly, but its late where I am. I hope this thouroughly explained my position, as I didn't have time for this earlier.

Maybe I misunderstand your post mrstickball, but are you only taking the three months ahead of the price reduction and comparing it to the three months after a price reduction?

You're always going to see a reduction in sales before a price reduction (if it had been rumored) and a boost after a price reduction but the boost is (usually) representative of people who didn't buy a system because they anticipated the price cut. 

On top of that problem the timing of the XBox's price reductions has to be seasonally corrected because Q1 (January through March) is typically a very slow period in gaming and you start to see higher sales in Q2 and the price reductions happened late Q1 or early Q2 ... 

all in all...i agree with mrstickball...price cuts help keep good systems with good feedback...and for poor systems that didnt sell well it defintely gives them a huge boost...as far as games are concerned...gorgepir ur right...a system isnt gonna sell if u dont see any games...but price plays a big part though...and games do to ^_^

@ Mr Stickball,
According to the data you have put up, 6 out of the 9 price cuts had an increase in sales and the data I have put up, 6 out of 11 price cuts.
The point I was saying was not that price cuts make a console lose sales, but that it had small impact. To have small impact in a mathematical model (or in other words to be independent) a price cut should neither increase the number of sales all the time or decrease. I think even your post proves this point. The 25% price cut in Europe for the PS2 was not able to increase sales, and neither was the 20% price drop for the Xbox or the 20% PSP price cut.

"Likewise, with the 20-25% increases, each saw a moderate gain."

Regarding the Gamecube agreed. The Xbox had a 54k loss, the PS2 a 33k gain and the PSP remained the same. (the gamecube had a 60k gain)So without the Gamcube, a 20-25% price cut resulted in a 20k loss! There goes your theory. I guess it was because Gamecubes first price cut was 20% it had a good impact.
According to the data, the first price cut generally does effect even if it is 20% as gamecubes.

"Now, with that kind of very decicive numbers on pricing"

To sum up:

10-15-25% Doesn't matter
30% A good increase in sales
The first price cut generally increases sales. It is not decicive in my opinion. Maybe I am reading them wrong.

And regarding to only looking at the 3 months before and after, I agree that a price cut will in the short term affect sales, but not in the mid and long run.(6 - 12 months) I guess that was the point I was trying to make.
Once again, I agree that price cuts will help systems and overpriced systems will have to be lowered. The reason that companies reduce the prices, is so they don't lose momentum.

gorgepir, I think the point that you're missing is that you don't have data available to see what sales would have been had the price not dropped.

I'll take your PS2 America numbers as an example.  So at $199, the PS2 sold 900+ a month, and at $179 it sold roughly 600 a month.  This does not mean that the price cut didn't help sales.  There are tons of other factors left out of this analysis, such as major game releases, what the competition is doing, market saturation, etc.  If the price had stayed at $199, sales would probably have been lower than 600 a month during the same time period.

Yup agreed. The point was not that price cut doesn't help sales, it was that price cuts don't necassarily help increase sales. Meaning they tend to keep momentum, not increase it. Regarding tons of other factors, agreed, that was the point I was trying to make. Those seem to be more important than price drops.

Edit: Not the 20$ price cut didn't help increase sales in the some months after the price cut, but it didn't have a lasting effect.