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Forums - Microsoft - Microsoft working on Price Competition for "PS3 Spring Price Cut"

The 360 needs to sell for at least $100 less than a PS3 to maintain their sales advantage.

If Sony drops to $350, MS will do nothing. If Sony drops to $300, expect a 360 Pro price drop to $250 and a Arcade drop to $179.



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SamuelRSmith said:
People do realise that there is a diminishing effect with price cuts, don't they?

Please realise that a drop from £200 to £150 has a much greater effect than the drop from £150 to £100. There is a reason as to why the PS2 is still £100.

Even if Microsoft does match Sony in price cuts (which I significantly doubt), the effect in demand for the Xbox 360 will not be as great as the effect for the PS3.

True, in the sense that people will start to wonder why the hell MS is dropping the price so drastically.  In turn making people think there is something wrong with 360, which means less people will be interested in the 360.

Atleast I think that is where your going with this.

 



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Squilliam said:
"Since we all expect a $100 price cut"

...

"Microsoft cannot drop the price again"

You do realise that:

1. Microsoft makes $40 per year on every live subscriber
2. Microsoft sells significantly more online content
3. Microsoft recieves significantly more royalties from games.
4. Microsoft uses commodity chip suppliers and commodity devices like Ram and DVD-Rom drives.
5. Microsoft will give Sony all the rope they need to hang themselves.

See!  There is hope for this community yet!

 



chaospluto said:
SamuelRSmith said:
People do realise that there is a diminishing effect with price cuts, don't they?

Please realise that a drop from £200 to £150 has a much greater effect than the drop from £150 to £100. There is a reason as to why the PS2 is still £100.

Even if Microsoft does match Sony in price cuts (which I significantly doubt), the effect in demand for the Xbox 360 will not be as great as the effect for the PS3.

True, in the sense that people will start to wonder why the hell MS is dropping the price so drastically.  In turn making people think there is something wrong with 360, which means less people will be interested in the 360.

Atleast I think that is where your going with this.

 

 

 No, what I'm saying is that the amount of people who found "Product A" too expensive at £200, and would pick it up for £150 is LESS than the amount of people who find £150 too expensive, and would wait 'till it dropped to £100.

If a box of matches dropped in price from 30p to 15p would sales explode? No, because the product is already really cheap.



... Maybe this is MS saying if the PS3 drops in price they'll raise the price of the 360?

You never know xD



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Phrancheyez said:
LOL, that's true..but I really think MS wants to avoid similar prices for the two consoles. They know Sony will destroy them if they do - why do you think the Arcade came down to $200? The PS3 was more expensive and outselling them for a long time..a $200 price difference is major, and is the only thing that changed the momentum in the first place. I'm not saying they don't have a trick up their sleeve..I just hope it isn't to bundle extra stuff with it, because I don't really see that helping them as much.

PS3 more expensive?  Correct.

PS3 outselling 360 for a long time?  Incorrect.  In 2008, of the 12 months of the year the PS3 outsold the 360 for around/about 7 of them worldwide.  Considering the total number of months that both were on sale, that does not constitute a long time.  If so, then the 360 has outsold the PS3 for a VERY long time.

$200 price difference?  Only if you count the Arcade SKU, which statitistics have shown accounts for around 50% of 360 sales.  Pro and Elite models have sold really well too.

 



Actually, the biggest effect from Microsoft dropping the price would probably be a change in which SKU is demanded. The Arcade is already the inferior SKU (both technically and economically speaking), and prices of the other SKUs fall, the demand for the Arcade falls with it.



Darth Tigris said:
Phrancheyez said:
I find it funny that MS has to do anything to remain 'price competitive' when your competitor is priced so much higher than you are, and even with a price cut will still be higher. It's called fear...they know if the PS3 is at or near the same price, the 360 gets blown out of the water.

I also don't think that Sony is lying about not having a 'price cut'. It's not a price cut, because they won't be lowering the price of the current console. They'll release a slim version with a new price, and if the slim version never had a 400-500 dollar price, it's not a price cut to sell it at 300-400.

I don't think they're lying.

Why?  The Arcade SKU of the 360 is cheaper than the Wii, but its not blowing it out of the water.

Your post has a lot of baseless speculation ...

 

You haven't been here since last year during the many weeks of which the PS3 outsold the 360.  Don't try and act like you know anything about it now.  The 360 and PS3 appeal to the same crowd.  The Wii appeals to a much larger crowd and isn't affected by either the PS3 or 360 sales at this point in time.  If the 360 was $130, the Wii would still sell like crazy (edit:) and outsell the 360.  That's just a fact.

 



sony will lower the price i believe and it might be around either killzone 2 or resident evil 5. they need to do it with some kind of mega game to help increase sales even more than normal. also sony knows with the economy not getting any better anytime soon, either they drop the price soon or agree that they will finish 3rd this gen.



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Darth Tigris said:
Phrancheyez said:
LOL, that's true..but I really think MS wants to avoid similar prices for the two consoles. They know Sony will destroy them if they do - why do you think the Arcade came down to $200? The PS3 was more expensive and outselling them for a long time..a $200 price difference is major, and is the only thing that changed the momentum in the first place. I'm not saying they don't have a trick up their sleeve..I just hope it isn't to bundle extra stuff with it, because I don't really see that helping them as much.

PS3 more expensive?  Correct.

PS3 outselling 360 for a long time?  Incorrect.  In 2008, of the 12 months of the year the PS3 outsold the 360 for around/about 7 of them worldwide.  Considering the total number of months that both were on sale, that does not constitute a long time.  If so, then the 360 has outsold the PS3 for a VERY long time.

$200 price difference?  Only if you count the Arcade SKU, which statitistics have shown accounts for around 50% of 360 sales.  Pro and Elite models have sold really well too.

 

Only if I count the arcade SKU?  Why wouldn't I?  Of course I'm talking about the arcade SKU..and if it accounts for HALF OF ALL SALES, in which 360 is not outselling PS3 2:1, then PS3 would be generating higher sales.  However, since we're including where HALF OF ALL SALES of the 360 come, which is $200 cheaper, you make absolutely no sense.  Pro and Elite haven't sold well enough to compare to their PS3 counterparts...the $200 difference is where the momentum shifted.  The $200 difference is when the 360 started outselling the PS3.  The $200 difference is the only thing keeping 360 above PS3 in WW sales every week.  Period.  End of statement.  This argument is done.