If Ballmer's goal was simply to have XB360 faring well, he'll be happy. If he wished to crush Sony, he'll be disappointed. In this case, so much the worse for him and so much the better for everybody else.
TBH i think the xbox will sell just as well as it has done, but can see the PS3 doing better in the short to medium term
libellule said:
hey Squilliam , if I try to punch your face, you have 2 main solutions : or you take it because u dont care or you try to avoid it because it could hurt you : you react : it is what MS is doing
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Well, what Sony is doing is finally getting around to responding to a round house kick square in the face from MS.
Squilliam said:
Um, in reality they are losing the high end SKU and not the mid range SKU. Its a convenience issue, and nothing more. Its simply easier for them to drop the Premium and reconfigure than it is to drop the Elite as they are always going to be trending towards larger HDDs anyway. There are rumours of even larger HDDs being offered for people who need more than 120GB. What they do depends on their goals. I see no room for concern here, they will do whatever action they deem to suit their interests best. They don't have any reason to worry about Sony running away with anything because their 8M console lead gives them room to sit for a year and focus on profitability if they so wish. Sony has far more reason to worry about what Microsoft does than vice versa as the latter really does have the resources to cut the price significantly and the profitability to match, especially considering Microsofts strong Live revenue.
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Kinda funny how your tune has changed over the last month. Now you agree with my line of thinking, that the 360 is doing pretty darn good at the moment, and MS will be content to ride things out until next year.
Remember this thread?
My post:
I still don't think the 360 will get a much of a price cut this year. The base price for the console won't dip below $179, if it ever gets lower than $199 (this year, I mean).
As you said, sales are up 17% year on year, and last year they were up over the previous year. Sales are great for the 360, despite a recession and other factors working against it. I can't see another price drop doing all that much to increase sales unless it's a drastic price cut. If an $80 cut (30%) could only increase sales 17%, another price cut only a year later won't do much more.
It's like the GameCube dropping to $99. I mean yeah, it'll boost sales to a degree, but the console's fate for the most part is already sealed. Might as well wait until sales start to dip to drop the price again. I mean, look how long Sony waited to drop the ps2 from $129 to $99.
I think Engadget's "mole" is closest to the mark. Replacing the Pro with the Elite SKU is a way for them to do a price drop of sorts and increase sales without really losing any revenue. I think they'll do that this holiday season, then ride things out until the end of 2010 when they'll re-launch the 360 with Natal, doing some DSi-like upgrades to the system overall. That'll be their big chance to capture a larger part of the market.
I don't think their focus at the moment is to increase sales of the 360 as is. I think their focus is to simply keep the momentum they have going until Natal is ready and they can try and shake up the market.
Your response:
That 30% cut only applies to the people who want the Arcade SKU, it doesn't make up the bulk of the sales. The main Xbox 360 price cut came from the $50 or 15% cut on the Premium SKU, and overall sales are up by 'only' 17% but they would have been down by at least 10% YOY if not 20-30% without it so overall the price cut had a significant effect.
A comparison with the Gamecube/PS2 are moot, with the former the PS2 was the all out most wanted console and with the latter Sony uses it as a profit driver. They certainly did not have several years of increasing software sales to look forward to as an incentive to cut the price, the profit was on the console itself.
IMO the mole has it wrong or the whole story hasn't come out yet. They have already replaced the Arcade SKU with the 512mb model quietly and now they are probably looking to clear both the Premium and Elite so they can bring in SKUs with larger HDDs to coincide with direct downloads of games. They need 120GB minimum in the Xbox 360 and better would probably be something like 160 or 180GB if they wanted your average Premium owner to download games onto the system. There have already been rumours that they have been checking out larget HDD sizes like 320 and 500GB.
They have a focus on Natal, but they also need to keep momentum up so they can drive into the next holiday season with good momentum. To really launch Natal successfully they will need a lot of consoles on the ground to spur adoption from developers so they have the incentive to create software to give consumers the incentive to buy the interface. It makes their job a lot easier with 55M consoles sold than say 45M
You were pretty adamant that MS would continue to drop prices this year. I always figured MS were pretty comfy were they were, and saw no reason to cut prices in the near future, outside of the Elite.
Honestly, MS cutting the price this holiday season would've only made sense if they wanted to hinder Sony and the ps3 as much as possible while not carrying what harm may come to themselves. In the end, MS is in this for the money, and they have little reason to cut the price of the 360 this holiday without some deeper, darker motive. They hold the high ground in this battle. It would only cost them more to get higher.
makingmusic476 said:
Kinda funny how your tune has changed over the last month. Now you agree with my line of thinking, that the 360 is doing pretty darn good at the moment, and MS will be content to ride things out until next year. Remember this thread? My post: makingmusic476 said:
I still don't think the 360 will get a much of a price cut this year. The base price for the console won't dip below $179, if it ever gets lower than $199 (this year, I mean). I don't think their focus at the moment is to increase sales of the 360 as is. I think their focus is to simply keep the momentum they have going until Natal is ready and they can try and shake up the market. Your response: The sales are only up until they hit the holidays and then we face the music and find out how much demand has been sustained or lost in 12 months since a price cut. The important price point for the holidays is the Xbox 360 Arcade because that makes up the bulk of sales, but it doesn't really have direct competition from the PS3 at this point. They may only cut that price more than $0-$20 if they are swinging for the fences in terms of overall bulk of sales. The important price during the year is the Premium console which needs a $50-$100 price buffer to compete with the PS3 during the year when it makes up the bulk of the sales.
That 30% cut only applies to the people who want the Arcade SKU, it doesn't make up the bulk of the sales. The main Xbox 360 price cut came from the $50 or 15% cut on the Premium SKU, and overall sales are up by 'only' 17% but they would have been down by at least 10% YOY if not 20-30% without it so overall the price cut had a significant effect. A comparison with the Gamecube/PS2 are moot, with the former the PS2 was the all out most wanted console and with the latter Sony uses it as a profit driver. They certainly did not have several years of increasing software sales to look forward to as an incentive to cut the price, the profit was on the console itself. IMO the mole has it wrong or the whole story hasn't come out yet. They have already replaced the Arcade SKU with the 512mb model quietly and now they are probably looking to clear both the Premium and Elite so they can bring in SKUs with larger HDDs to coincide with direct downloads of games. They need 120GB minimum in the Xbox 360 and better would probably be something like 160 or 180GB if they wanted your average Premium owner to download games onto the system. There have already been rumours that they have been checking out larget HDD sizes like 320 and 500GB. They have a focus on Natal, but they also need to keep momentum up so they can drive into the next holiday season with good momentum. To really launch Natal successfully they will need a lot of consoles on the ground to spur adoption from developers so they have the incentive to create software to give consumers the incentive to buy the interface. It makes their job a lot easier with 55M consoles sold than say 45M You were pretty adamant that MS would continue to drop prices this year. I always figured MS were pretty comfy were they were, and saw no reason to cut prices in the near future, outside of the Elite. Honestly, MS cutting the price this holiday season would've only made sense if they wanted to hinder Sony and the ps3 as much as possible while not carrying what harm may come to themselves. In the end, MS is in this for the money, and they have little reason to cut the price of the 360 this holiday without some deeper, darker motive. They hold the high ground in this battle. It would only cost them more to get higher. |
Well I did say that I didn't have the whole picture. The price increases in the U.K really do set a tone for the whole thing. They wouldn't increase the price if they intended to reduce it anyway. But yeah with this new information I agree that you were right. It seems that they are focusing on profitability and value add for this holiday seasn rather than price. I suspect they will do some pretty nice bundles, in the vein of 2007 rather than the pittiful bundles they did in 2008 holiday season.
The only thing I really disagree with is the Elite price drop, its not really a cut its just the most convenient way of increasing the percieved value of the mainline model by replacing it with a model name which was always a little more expensive. Its also the easiest way for them to increase the HDD space without losing money cutting the Premium stock and without having the console go out of stock. The Elite now has less in the box than the old Premium in terms of connectivity features.
They really are sluts, they have only really decreased the price by 25%/33% in the U.S in the four years the Xbox 360 has been out and it looks like it will take 5 years for them to really really cut the price.
Tease.
| libellule said: funny how by dropping the elite price they are basically trying to directly counter the PS3 price cut conclusion : they still fear PS3 a lot ... |
but PS3 is still behind xbox 360 by a lot...
Nightwish224 said:
It's called being competitive. Everyone does it, not just Microsoft. What's so unoriginal about being competitive? |
unoriginal wasn't the right work.
but man if you are confident you don't lower to price.
that's like saying "i trust you, but i wont let you my car".
that means they dont trust you, same for the price cut, if they were confident of their 200-400$ they wouldn't lower the price.
Xoj said:
unoriginal wasn't the right work. but man if you are confident you don't lower to price. that's like saying "i trust you, but i wont let you my car". that means they dont trust you, same for the price cut, if they were confident of their 200-400$ they wouldn't lower the price. |
It's about selling systems for Microsoft. What do they care about confidence?
Has anyone thought they aren't worried BECAUSE they are prepared with there own price cut? To return to the face punching analogy, If I am expecting a punch in the face for ten months, then im not too worried. I plan to avoid it and minimize its impact. I think MS has done exactly that. Live is a huge stream of profit, and they are pouring more into it. An xbox live subscriber today gets far more than one did in 2005, and with Facebook/last fm on the way this will continue. They have padding in that amount of 8 million consoles, that alone will minimize the impact of what ever Sony can do.
Nintendo didn't prepare a cut: they must be scared, so!!! :-O 
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