Kantor said:
You've made some pretty ridiculous assumptions there.

Firstly, the PS3 being 3 million at a $400 price. Well, the sales only declined from 2007 to 2008 because the PS3 had a price cut in holiday 2007, while the 360 had one in holiday 2008.

Yeah, so your justification that the PS3 would have maintained its sales for the holiday season in spite of being down the previous year and during this year is due to?

I'm not saying that. What I'm saying is that you cannot increase on possible 2009 holiday sales with your fabricated percentage, you would have to increase the last available data, which would in this case be holiday 2008.

Fabricated? Its the best estimation I could give considering the PS3 is down YOY now and over the last holiday season! So therefore it would continue to lose sales over the last year without a price cut.

Lol, this is getting complicated. Okay, the PS3 is down YOY since the 360 price cut just because of that. Once we hit September (or whenever it was that the cut happened), without a price cut, the PS3 would be relatively flat YoY.

Historical evidence shows us that so far this gen, in the mini-HD war, the momentum is with whoever cut the price last. Sony cuts price, PS3 is in second. Microsoft cuts price, 360 is in second. Thus, if Sony were to cut the price, PS3 sales would increase, not only because it is now at an affordable price, but because it is at a MORE affordable price than it was previously. The PS3 is looking to have a better holiday lineup than the 360, so with prices equal, PS3 demand will soar above that of the 360. Those originally considering 360 purchases because they couldn't afford a PS3 would reconsider, because now they CAN afford a PS3.

Err, so if there are two price cuts at about the same time your point becomes completely invalidated.

I was wondering if I should get to that. I don't believe Microsoft will cut price at all this holiday season. I don't remember them responding to the PS3's 2007 price cut, and I see no reason why they would now. One price cut a year isn't great for Microsoft's finances, unless the manufacturing costs can decrease as well, as they would with the PS3 (Slim). Microsoft's Entertainment Division (or whatever it's called) just made a profit for the first time in, what, ten years? I don't think they are eager to lose that. And as I will mention later, the 360 is at mass market price, and now any price cuts will be either going below that price or value adding (a $200 Pro), neither of which has as much effect as a price cut from $400 to $300.

Noone, not even Sony thinks that the expected price cut will be good for their short term finances either. Furthermore the EDD made a profit, but looking deeper into the financials the Xbox 360 makes all of the profit and its not responsible for all of the losses. They could afford to cut the price and they have been far slower at cutting the price of the Xbox 360 than Sony has with the PS3.

Yes, Microsoft is slower at cutting prices on the 360 than Sony with the PS3. So if Sony were to cut the price after two years since a price cut, why would Microsoft do the same just one year after their previous cut?

Whilst the Xbox 360 Arcade is at a mass market price, its not at the lowest mass market price and nor is the Xbox 360 Premium which is the main SKU at the mass market price of $200ish dollars. Furthermore im sure they also reserve the right to release their own slim console and at the same time im sure they would introduce wireless (which they can't at the moment), so not only can they cut the price they can also close the feature gap between the PS3 and Xbox 360.

I don't think the Arcade quite needs to go below mass market price. And if it did, like I mentioned, there wouldn't be much of an effect. As for the 360 Pro, that's what I'm saying would be the most likely option, but once you are at $299, you don't cut $100 at a time, you cut $50 at a time. So it would be $249, with a minimum Arcade price of $179. Value can be added yes, but there's nothing with as much effect as a price cut going down to mass market price, except a price cut which puts the console at mass market price.

So, you cannot expect 360 sales to remain steady while PS3 sales rise slightly.

Another factor to consider here is Japan. Japan is the only region left where system sellers (short of a few huge games like Halo 3) really matter. 2008's holiday saw very few PS3 system sellers in Japan- White Knight Chronicles is about it, and even that isn't much. 2009, meanwhile, has FF13 and GT5, both of which are huge in Japan, and will give lasting boosts, especially if coupled with a price cut.

I considered Japan and these games. Japan is the reason why I expected the PS3s base demand to have only dropped to 3M @ $400 in spite of being down in sales considerably YOY.

So you would expect it to sink below 3 million with last year's Japan numbers? All I can say is...I don't agree. If Sony didn't cut the price, Microsoft definitely wouldn't, because it would be taking a profit hit for no reason- the 360 is already at mass market price, now they just need to add value i.e. improve the Arcade, or make the Pro $200, and this won't have as much effect. So I think they would remain around the same as last year.

The PS3 is down below the Xbox 360 of 2008, its looking to fall below 100k a week and yet you believe that it could still sell as well as last year? The recession still has to get worse before it gets better and this will be the first holiday season effected by the recession with full force.

No, the PS3 isn't below the 2008 360. Have a look: http://www.vgchartz.com/forum/thread.php?id=73051&page=1 . It's above it, and by a fair bit, too. The 2009 360 is also below the 2008 PS3. And if the recession was in such full force, 360 numbers would suffer as well, because all unnecessary expenditure would have to be cut.

Finally, the PS3 outsold the 360 (albeit only slightly) in holiday 2007, back when it had very little quality software and a still-pretty-high price tag, so I'm pretty sure it can do that again.