Squilliam said:
4 words: price elasticity of demand. What mass market price means is that revenue falls when they lower the price (decreased effect) now price elasticity falls the closer the console gets to the optimum. Since the PS3 showed a price elasticity of roughly -1.07 therefore with a 25% cut the total sales in the longer term will likely be ~20-25% higher than they compared to say Juine this year when the sales were following a more natural curve with fewer slim/cut rumours. Especially as the market has reached the half way point in terms of sales. |
Really can't follow that paragraph of overly compressed economics, so I have no idea if it's flawless or just an attempt at pseudo-intelligence, but I feel similarly to you and Seece in that things tend to work on a "Sony one year, Microsoft the next" cycle and so Slimebeast should bear in mind that whilst the Slim may help PS3 to a stronger Christmas this year, Microsoft will no doubt deal their next big hand (Natal, cuts, giant software such as Reach or Gears 3) in the run-up to Christmas 2010 and thus regain momentum.









