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Forums - Sales Discussion - Critical Xmas for the Xbox360 ???

libellule on 31 July 2007

I know there is nothing news in this article but it is still interesting :

 
 
  
 
 
 
DFC: Competition Breathing Down Neck of 360

During the first half of 2007, Microsoft's Xbox 360 shipped only a bit over 1 million units compared to 6 million Wiis and 4 million PS3s. As DFC says, the competition is breathing down 360's neck and Microsoft needs to really step it up in second half of this year. More within...

DFC Intelligence often releases forecasts in multiple scenarios that account for different factors such as price decreases, new products and form factors, and other determinants that can cause a significant change in the marketplace. So far in 2007 it is safe to say that the market has followed what we called the Nintendo Best Case Scenario. More specifically:
  • The Nintendo Wii is on track to meet our Nintendo Best Case Scenario forecasts for 2007.
  • The Nintendo DS looks like it may exceed our 2007 forecasts by 10%.
  • The Sony PlayStation 3 is on track to match our sales forecasts for 2007 under the Nintendo Best Case Scenario. In terms of installed base it looks like the PS3 will be in third place until at least mid-2008. To move more PS3 units in 2008 we think Sony will have to be more aggressive on pricing.
  • The Microsoft Xbox 360 is running behind where they should be to maintain a strong market position. However, the Xbox 360 lineup is heavily weighted towards the second half of 2007. If the Xbox 360 can have a strong holiday 2007 they may be able to maintain at least a second place position for another year.

Conclusion: The pressure is on Microsoft to really drive sales of the Xbox 360 this holiday season. If Halo 3 and other products fail to drive Xbox 360 sales, the system will soon flirt with numerous unsavory scenarios, the worst of which is the danger of becoming a distant third in the video game market share battle.

There has been a great deal of focus put on Sony's PlayStation 3 launch woes. However, so far in 2007, the news from the Xbox 360 front has not been encouraging. In the first six months of calendar 2007, Microsoft shipped slightly over 1 million units of the Xbox 360 compared with Nintendo shipments of over 6 million Wii systems and Sony shipments of over 4 million PS3 systems. The Xbox 360 had a one year lead, but the competition is catching up fast.

Of course, the bulk of sales for the video game industry come in the second half of the year and it can be a mistake to extrapolate performance in the first six months to the full year. For the Xbox 360, Microsoft is putting the focus almost entirely on the second half of 2007. Microsoft has humbly called the upcoming Xbox 360 titles the "Greatest Holiday Lineup in Video Game History." Whether it is the greatest lineup in video game history is of course subjective. However, the fall 2007 Xbox 360 release schedule is clearly a strong group of products with a wide variety of games. We would say that this will probably be the last holiday season that the Xbox 360 will have such a clear software advantage over the competition. If consumers are not lining up to buy an Xbox 360 this holiday, Microsoft clearly has problems.

The competition is breathing down the neck of the Xbox 360. The Nintendo Wii has almost caught up with the Xbox 360 in sales and the PlayStation 3 is looking to have a much stronger lineup in 2008. If Sony can keep its PlayStation 2 core base happy for another year or so, they will be in a good position to migrate them to a PS3. This means for Microsoft it is imperative they get consumers into the store NOW.

One concern is that Microsoft seems to be in danger of losing its position as the online game leader. Microsoft has pushed the Xbox Live online game service as the key distinguishing factor for its systems. However, the PlayStation Network does a good job and offers many of the same features as Xbox Live. Upcoming offerings like PlayStation Home and some fairly high-end downloadable games, start to push the PS3 toward the cutting edge when it comes to online offerings.

Even the Wii seems to have enough online features to keep the average consumer happy. The Virtual Channel let users download classic titles. We have been having fun playing YouTube videos on the Wii and battling people online with the recently released Pokemon Battle Revolution works just fine.

There is nothing about Xbox Live that would really standout for the average consumer. The ability to download high-definition video is nifty, but that is not why consumers buy video game systems. The competition actually stands out in several key areas such as Wi-Fi connectivity and, most importantly, being free to use. Xbox Live is the only service that requires a paid subscription to play others online. This is a key limiting factor for not only consumers, but also game developers. When Microsoft talks about Xbox Live having over seven million users, they include free Silver members with no online game play capability, old Xbox owners that have not upgraded to the Xbox 360 and Gold members. Only the Gold members can play Xbox Live games online.

In the grand scheme of things we don't think online games will be a major determining factor in the purchase of this generation of game console systems. As always it comes down to the games. This holiday season, the Xbox 360 clearly has solid product offerings. We won't be the judge of whether this is the greatest holiday lineup ever. What we will say is that if this lineup of titles can't move boxes off the store shelves, come January, we will have to seriously revaluate Microsoft's long-term position in the marketplace.

http://biz.gamedaily.com/industry/feature/?id=16979

 

A LITTLE MORE SPECULATION :

A POST ON INTERNET (only speculation, but seems possible) :

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I have it coming from a reliable source that CURRENTLY

The Core will drop to 279
The Premium will drop to 349
The Elite will drop to 449

This will clear out the inventory of the Premium which is the most manufactured 360 and the most sold as they know Premium will sell the most until the demand for Elites pick up in 2008. Elites and Cores have relatively the same manufacturing percentage: low at the moment until FALL this year.

When the 65 nm processor falcons are introduced across all SKUs, the holiday season, a month or so after Halo 3 will see the core drop to $249, The Premium will drop to $299 and the Elite will drop to $399

The Core, Premium and Elite Falcons will have a redesigned motherboard which includes HDMI across all SKUs, a quieter DVD Drive and the falcons will STILL have an extra fan heatsink as Microsoft is not prepared to take anymore risks.

The Falcon will reduce the cost to manufacture the Xbox 360 CPU and GPU by ~40-50% but Microsoft will incure additional costs on the new fans and HDMI across all SKUs. Still at the 249,299 and 399 price, Microsoft will expect a profit from the console by early 2008 when the Q4 results are announced."

****



Time to Work !

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Goddbless on 31 July 2007

I agree with everything stated in that article. I wonder if MS even cares about these things right now? Their actions certainly don't show it. I think they're content right now with their slim lead over the Wii.



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Punisher on 31 July 2007

100 agreed.

It's more or less critical X-mas for 360 :p



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El Duderino on 31 July 2007

Personally I see this christmas as more important to the PS3 than to the 360 but you are right in most points, personally I don´t see online gameing as the big thing this generation as its hyped up to be, maybe thets just the ever unimpressed PC gamer speaking in me, I really don´t think playing online will stay a gold members only thing for long but I could be wron with that, if MS can drop the price by 100$ and bring the falcon out on time I see no problem at all with the hollyday season, expecially with the game lineup.

I think people make to much of the hole RRoD thing (like they invented flawed consoles), yes its crappy but MS is owning up to the problem and I think that when the falcon comes to stores it will be the same as when Coke went from New Coke back to Classic Coke, people will love it, they don´t see a problem that needed to be fixed, they see a product of more value at a lower price.



 

 

 

Gamerace on 31 July 2007

I've said it before, and I'll say it again. M$ needs to drop their price (on all skus) by $100 prior to the big game releases (especially GTA IV) and then totally outsell Sony (in NA at least) this holiday season to remain competitive.
If not, then 360 will follow xbox sales all the way to a solid last place finish.



 

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leo-j on 31 July 2007
Gamerace said:
I've said it before, and I'll say it again. M$ needs to drop their price (on all skus) by $100 prior to the big game releases (especially GTA IV) and then totally outsell Sony (in NA at least) this holiday season to remain competitive.
If not, then 360 will follow xbox sales all the way to a solid last place finish.

Just that 40gb sku being true can wipe the floor with the 360, but its just a roumer.



 

mM
Erik Aston on 31 July 2007

Basically, if 360 can't become the hot console this Xmas--either WW or just in America--it never will. MS are talking up their "best holiday lineup ever," but they really mean "best XBox holiday lineup ever," and by "ever," they mean its the best lineup they'll ever have in the future, too. Halo and GTA are the two biggest current brands in gaming not on Wii or DS, and there will never again be a first Halo/GTA launched on 360. So yes, its now or never.



"[Our former customers] are unable to find software which they WANT to play."
"The way to solve this problem lies in how to communicate what kind of games [they CAN play]."

Satoru Iwata, Nintendo President. Only slightly paraphrased.

El Duderino on 31 July 2007

leo-j, youre right its just a rumor... but it would be Sonys smartest move yet (no disrespect) but that would be a worst case scenario for MS (still it would be to early to whipe the flor... maybe in 08) and the 360 is way overdue for a pricedrop, the only logical explanation it hasn´t dropped yet is that they are making a big Halo3-Falcon-pricedrop strategie to max. the sales for the second half of the year.... if the 360 doesn´t drop by 100$ then MS deserves to be last.

@ Erik Aston: I don´t think anybody expects the 360 to be the "IT" console...ever, but MS can build on the 360s strenghts, its the cheapest HD-NextGen console with the biggest game library, if they get the price to the sweet 200$ point they may be able to get lots of casual (type) gamers (you know whi I mean) in late 07 and throughout 08 and make it very hard for the PS3 to catch up in 08. This would mean more ports from the PS3 and more PC/360 exclusives making it impossible be be another originall XBox sales wise. 



 

 

 

outlawauron on 31 July 2007

Well, Halo 3 and GTA IV will sell more than any other this holiday. ......

They will do fine.

The PS3's most critical holiday, i think, will be in 08 rather than this year.

By then, more and more big games will have landed and the price will have dropped. Proving as more vital than this one.



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endimion on 31 July 2007

Xbox was a lost cause anyway... the market configuration is different.. and that article is totally missing the point of what is up to come.... they are 100% right on the analysis of the first half, but completely wild guessing the second half with a clear preference for PS3.... once again the MS strategy is yet to be unfolded... and I would be more worried about PS3.... because if any big cut is coming on MS side for 2007 that's going to be a big blow for PS3 and sony that can't really afford to follow it....

with XB they showed they can do a gaming system with good games.... with XB360 they will install a strong fan base and with the next gen they'll take it all.... things work by three with MS lol :)

but i'm pretty sure the stress is higher at sony PS marketing dept than MS XB dept right now..... october the final blow of the year is going to fall.... and it's going to be dreadful....