misterd said: NightStalker said: I have a feeling that Sony could win this price war. I think they still have the ability to lower the price of the PS3 to $400 and MS really cannot lower the 360 anymore as they have lost so much money. even with the Elite at $400, the Premium at $350 , and Core at $250, a $400 PS3 will be something to be reckoned with.   How does Sony, which is likely now back to losing $200 per console, able to afford yet another cut, but not Microsoft?

 

Simple becuase they are gaining a profit in europe , for every ps3 sold they lose less the one hundred dollars since the price of the blu-ray drive has been cut, as well as the possibilty of no emotion engine in the 80gb design. You see they will gain money from the 80gig device, but lose some over the cheaper 60gig device. But gain in other areas with the cheaper 60gb design. But microsoft cannot afford a price cut since the more 360's they sell before the 65nm ship, the more repairs, the more repairs the more money loses. They arent making any money on selling a 360 console anymore.

TheBigFatJ said: leo-j said: thats cool, but I doubt it will happen, or is it that they love to lose money? Even at $350 for the premium they should be making money.  And $400 for the elite would almost certainly be making money per unit sold. A price drop now would hurt Sony pretty badly.

 

No, your wrong, the ps3 is making money for sony in other ares including europe,  I price drop on the 360 would hurt microsoft real bad, I MEAN REAL BAD. They just started making a profit per 360 sold and a price drop would make them lose money again.

Why is everyone laughing at the 360 losing money when the PS3 has got them beat several fold in terms of losses. At least the 360 is in a position where it could turn a profit if they so chose to in the near future, even if the PS3 sold as well as the Wii is it would be years before it was even able to sell at a gain much ales recoup its lost revenue. It's really not sound to point out the 360's losses when they don't even hold a candle to the PS3's. And even if the PS3 is making Sony money in some places, its not enough to offset the overall loss or shrink the margin between it and the 360. Unlike Sony (whose liquid funds have declined with each passing year) Microsoft remains strong and more than capable of taking a blow on the cheek. If they could survive the losses of the Xbox, this won't even be an issue for them.

It sounds almost like people here just angry about the PS3 price cut being possibly nullified by a 360 counter strike and now are scrambling to come up with justifications why a 360 price cut can't happen?

Lingyis said: ckmlb said: People were talking about the billion dollars in repair costs being insignificant to MS, but really it's like 1/5 of MS' total yearly net income or 1/12 of their revenue down the drain. I mean they can take it but it's definitely not insignificant. ahem, 1 billion is 1/5 of MS income last QUARTER. they make about $14 billion a year. probably $17-$18 billion this fiscal year with vista. EDIT: 1 billion is significant no matter how you look at it. even if a company makes $100 bln profit 1 bln is still 1 bln. in 2007 anyway.

 That 14 billion is not net income that is revenue. So 1 billion dollars is 1/5 of their net income of in a year and 1/14 of their total revenue. In either case this is a big hit.

GO Microsoft!!!!!!!!!!!!!!!!!!!1

Bodhesatva said: vizunary said: Not really "breaking" news, more like expected news. Analyst Micheal Pachter said on Monday that Microsoft will, in fact, reduce the price of the Xbox 360 tomorrow at the start of the company's E3 press briefing. He believes the $299 Core will drop to $249; the $399 Premium to drop to $349; and the newly released $479 Elite to drop to $399 in response to lower-than-expected (price of a PS3). Already reaching half of their pre-installed base in less than two years isn't terrible, what do they expect? The next couple months will be interesting to see what these price drops do to sales trends, not sure if they affect xmas sales though.... Are there xmas surges in the Japanese market as well?  Yes there are.

I guess I could've looked at the charts. It just surprises me is all, I wouldn't think that any significant portion of their population is Christian(not that Xmas has ANYTHING to do with Christianity). eh, whatever

@lingyis

"yep.  and then of course Apple sneaks in next year with its 2nd generation iTV, so both sony and MS end up losing billions just to pave the way for Apple.so, billions of dollars just so Apple knows what not to do."

Lets hope it's just as cool and "innovative" as the iPhone

i expect them to cut the price of the the core down to 250 to compete with the wii... the premium will go to 349.. and elite goes to 429 .. they are in a sweet spot so i dont expect them to get drastic with the price cuts..

comments on validity of each system being break-even:

360- No way. They have had to repair too many 360's with putting in new parts and all of that, and the MS people have said over and over that they don't expect to achieve profitability until 2008, which means, AFTER the product fixes will take place.

PS3- I doubt that the system is profitable at this point as well, simply because the numbers of hardware sales are so low.

So, i'm being sceptical about both....

"That 14 billion is not net income that is revenue. So 1 billion dollars is 1/5 of their net income of in a year and 1/14 of their total revenue. In either case this is a big hit. "

Actually MS profited close to 5 billion last quarter. So yes a 1 billion dollar loss is still huge, but that is basically only about 2.5 weeks worth of profit for MS

From http://www.microsoft.com/msft/earnings/FY07/earn_rel_q3_07.mspx

Microsoft Corp. today announced revenue of $14.40 billion for the quarter ended March 31, 2007, a 32% increase over the same period of the prior year. This revenue drove record profits with operating income of $6.59 billion and net income of $4.93 billion. Diluted earnings per share for the quarter grew 72% to $0.50, and included $0.02 in tax benefits and $0.01 in legal charges.

ckmlb said: Lingyis said: ckmlb said: People were talking about the billion dollars in repair costs being insignificant to MS, but really it's like 1/5 of MS' total yearly net income or 1/12 of their revenue down the drain. I mean they can take it but it's definitely not insignificant. ahem, 1 billion is 1/5 of MS income last QUARTER. they make about $14 billion a year. probably $17-$18 billion this fiscal year with vista. EDIT: 1 billion is significant no matter how you look at it. even if a company makes $100 bln profit 1 bln is still 1 bln. in 2007 anyway. That 14 billion is not net income that is revenue. So 1 billion dollars is 1/5 of their net income of in a year and 1/14 of their total revenue. In either case this is a big hit.

Ck, you should do research before stating things with such certainty.

http://www.forbes.com/lists/2006/18/Profits_1.html?boxes=custom

Microsoft's yearly profits are approximately 14 billion. Their revenue is over 40 billion. You can't make stuff like this up, it's much too easy to check.