NPD Sales for July 2015

Feb 12, 2015
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Deal. But it must be at a well known retailer across all stores and part of an advertised promotion and come with a minimum of one free game.

Lets make it a month haha

I have been reminded of another bet which I have set to be determined in November with two well known members so to avoid a conflict of interest we'll have to just see what happens Z. And settle for "I told you so" bragging rights lol.
 
Why do you say this?

A proliferation of huge, big value add bundles means that prices are getting cut? It's actually more the opposite. Big value add bundles exist to keep the price high while offering higher perceived value.
I'm also going to agree that these bundles are evidence of an incoming price cut. It seems like Sony is trying to clear the inventory of Batman and TLOU bundles. Combine these sales on older bundles with the lack of a price announcement for the Battlefront bundle... I think it's coming.

My guess is $50.
 
Aug 31, 2013
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Thanks. <3

I can see that, absolutely. However, bigger/better bundles could also be used as a substitute for price cuts for an extended period of time.
Sure, and the real question is, "Just how extended are we talking here?" Having bundles rather than price cuts obviously tells us that cuts aren't needed yet, but arguing bundles indicate cuts are coming later rather than sooner seems a bit of a stretch. You say bundles are a substitute for cuts — and I agree — but if cuts are unneeded, why would we need to substitute for them?

Indeed this is one possible scenario. There are also others. Perhaps they built too much inventory which is sitting in a warehouse somewhere, perhaps they're being proactive in fighting competition they sense, maybe there are some shipment targets for the quarter that aren't being hit and the bundles are being done to hit a bonus number. There are far more than just one assumption that could be made for the cause of new bundles coming out.
Sorry, I guess I phrased that poorly. Increasing value — whether by bundling or price cuts — is a strategy to boost sales. As you say, there could be a lot of reasons for them to try to boost sales. Maybe sales are dropping, maybe they just aren't increasing as quickly as Sony hoped. Regardless, they're actively trying to boost sales at this point, and as you say, bundles merely buy time before the true cuts come.

Depends. I thought for sure we'd see $99.99 Xbox 360 hardware by holiday, but instead we're still seeing 500GB bundles at $249.99. and 4GB bundles at $179.99. For last gen hardware which absolutely show flagging sales.
Wut? Doesn't it cost far more than $100 to build one? Why would you think that? :/

The Xbox One price wasn't just dropped. Fundamental changes to the product offering were made as well. The perceived value of the MS box can be argued as being lower than that of the PS4 due to the technical limitations, market position, software offerings, or many other factors. One could easily argue that the system was overpriced (and may still be). Not sure that's the case with the PS4.
I'd agree that the Bone was overpriced, and MS saw it too. So they bought some time with software bundling, unbundled the Kinect, and then cut the price. WRT to the value of the PS4, yes there were millions who thought it was worth $400, but there were billions who didn't. Sony lured in some more users with bundles, but again, there's a finite supply of people who feel that's a good deal, and once they've gone through those users, cuts will be required to maintain sales.

I see your point. No, bundles are not a permanent solution. But price cuts may only be done now (possibly) as a last resort. There's no coming back from a price drop. So it certainly looks to me like these guys are doing all they can to prevent that from happening as long as they can, no?
No question about that. The question is whether they feel it's a good idea to go through their third holiday season without reducing the barrier to entry since launch. I would argue the existence of bundles indicates harkens the arrival of price cuts more than it indicates the opposite.

I don't agree with the premise, and I'm not also not certain that Sony would consider that they "lost" last holiday. They sold a ton of HW with full margin, while MS sold more consoles but with arguably lower margin due to discounting and promotion. If I'm Sony, I take that margin and am very happy given my HW velocity and don't sweat MS selling some more boxes over a couple months. I could be wrong. But I'm not sure these guys are fighting each other as much as we may think they are or would want to.
Sorry, I meant "lost" in the sense of being outsold. And yes, as I said, the loss didn't mean much in the grand scheme of things; Sony still outsold MS worldwide, and came through the season in much better financial shape. No, bragging rights aren't the primary driver here, but I wouldn't say they're worthless either. Hence the bragging.

I think all we can assume from what we're seeing is that bundling may become even more prevalent and aggressive. 90% of HW sales in July were of bundles. Wouldn't be surprising to see similar share of bundles in holiday. Imminent is a tough word. A year from now? Sure, I can see price cuts by holiday 2016, especially depending on what happens over the next year+. But this year? Seems like the strategies are pretty clear. But I could be wrong.
I guess it depends on how long you think the bundle will carry them. They've been bundling TLoU since last Christmas. Bundles can delay a price cut for a year or so, but two years? There's only so much you can bundle before you look ridiculous, and as I said, at some point to simply need to lower the barrier to entry. Going three years without doing so strikes me as a bit crazy, not to mention breaking the precedent they've set with their previous consoles, even the wildly successful ones.

Perhaps... but it could also just be a case of not wanting to box oneself in a corner on pricing for units that are not coming out for weeks when you have other products already in market you're looking to move. You may be right, but I don't think that conclusion can be reached with a high level of confidence given the available information.
Sorry, I'm not sure I followed that. Why would announcing $400 for Destiny affect sales of Batman at $400? Seems that if anything, that would boost sales of Batman, because it would tell consumers they won't gain anything by waiting. Plus, as Zhuge pointed out, they could always drop the price before launch, so I don't see how announcing Destiny at $400 would "lock them in" to anything.


But Sony never announced the price on the MGS5 bundle till like 3 days ago.
Oh, really? Perhaps there was a possibility of them cutting the price before MGS launched rather than waiting until TGS or PGW.

What I'm saying is don't take one action as proof that a price drop must be happening. It doesn't work like that.
Oh, sorry, that's not what I meant at all. I was just saying that to me, the lack of pricing on the holiday offers was a stronger indicator of imminent cuts than the bundling. Taken together, and adding in other factors like Sony's traditional pricing strategies, I'll be fairly surprised if we make it through another holiday without an official cut of some sort.

Also I'm 100% behind cosmic. People read too much into the terms "Win" and "Lose" NPD. At the end of the day Sony may have lost in unit sales but they had the advantage on margin by far where as the Xbox One had a very short term temporary boost at the expense of margin. The companies, whilst competing, are not too hot on how many units the other has sold as long as they're selling well.
Yes and no. In a fairly split market, no, a few units here and there won't make much difference. On the other hand, yes, a decisive advantage in market share can have positive knock on effects for both the market leader and their customers. If you're not winning, you might console yourself with the fact that at least you're not going bankrupt, but that doesn't negate the advantages conferred by having a strong lead in the market. Therefore, working to establish and maintain that lead is definitely to your benefit.

But yeah, I wasn't saying Sony are assured to cut the price because they gotta win no matter what. But I don't imagine that taking the US this holiday hasn't crossed their minds.
 
Aug 18, 2015
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I disagree with this, have you seen the Smartphone industry the last 5 years? Apparently companies like doing that. I mean I've been expecting the SP industry to implode for years now still kicking somehow.
Or you could look at the TV industry (which is probably more accurate of a comparison). Sharp just announced they are exiting the business, and their main strategy was to push out large panels at below market prices...look where it got them. See also Panasonic plasma, Fujitsu, Hitachi, Toshiba....
 
Feb 16, 2010
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Sure, and the real question is, "Just how extended are we talking here?" Having bundles rather than price cuts obviously tells us that cuts aren't needed yet, but arguing bundles indicate cuts are coming later rather than sooner seems a bit of a stretch. You say bundles are a substitute for cuts — and I agree — but if cuts are unneeded, why would we need to substitute for them?
You sure you're not using the term "price cuts" in place of "demand generation"? Because I'd agree with that being necessary from now through the end of the cycle. One way to generate incremental demand is price cuts, bundles etc. I think we see cuts in time for holiday 2016, not sure about 2015. Happy to be wrong on this one, however. The more boxes out there the better.

The question is whether they feel it's a good idea to go through their third holiday season without reducing the barrier to entry since launch. I would argue the existence of bundles indicates harkens the arrival of price cuts more than it indicates the opposite.
Could be. And that is indeed a big question.

On the other hand, yes, a decisive advantage in market share can have positive knock on effects for both the market leader and their customers.
I agree with your point on positive impact for the market leader with a decisive advantage in share, but why do you say "and their customers"? What customer benefits are you thinking of?
 
Nov 18, 2013
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May 23, 2013
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Nov 15, 2013
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No way this happens. MS was practically giving the X1 for free last holiday, imagine the deals with H5. They're going to print money. Though I have a sneaking suspicion Sony is going to drop the U4 MP beta on the day of PGS. -_-
By 'print money' do you mean they are printing their own money just to give it away or burn it?
I don't think you got that saying right. Usually it means you are making tons of money. I don't see how they are going to make tons of money unless everyone decided to buy like 4-5 games with every system.
 
Dec 29, 2008
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PS4 Arkham/TLOU Bundle (CUH-1200) + Free Madden deal is live on Amazon and Walmart now, so it isn't just a GameStop deal.

Amazon

Walmart

Walmart also gives you another free game of your choice and 3 months of PS+
When you click on that Amazon link it says the cost is $498. Are Batman bundles sold out across the board for them to think they could get a $100 premium?
 
Nov 13, 2014
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On the other hand, yes, a decisive advantage in market share can have positive knock on effects for both the market leader and their customers.
By market share you hopefully mean "global market share" not an individual market.

Because as long as Sony keeps a 2:1 advantage in global market share I am sure they see it as a "win".
 
Dec 5, 2014
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When you click on that Amazon link it says the cost is $498. Are Batman bundles sold out across the board for them to think they could get a $100 premium?
You are a bit late on that deal, Arkham bundles sold out (via Amazon partners) when the madden deal popped up. You can still get the deal with TLOU Bundle + Madden which is still $399 or go to the Walmart link if they are still allowing.

This deal really helped out the PS4 just check Amazon hourly charts and see the madden PS4 being sold (currently 6 vs 13)
 
May 23, 2013
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Is it known for a fact if either Sony or Microsoft are still selling at a loss at this point?
Sony computer entertainment recently stated that PlayStation 4 is now cheaper to produce.

It was confirmed by Sony at launch that they were pretty much breaking even on hardware and that all it took was an extra game sale for Sony to profit.

So at the current $399 I'd be surprised if Sony weren't generating profit from the hardware sales of PlayStation 4.

Oh, sorry, that's not what I meant at all. I was just saying that to me, the lack of pricing on the holiday offers was a stronger indicator of imminent cuts than the bundling. Taken together, and adding in other factors like Sony's traditional pricing strategies, I'll be fairly surprised if we make it through another holiday without an official cut of some sort.


Yes and no. In a fairly split market, no, a few units here and there won't make much difference. On the other hand, yes, a decisive advantage in market share can have positive knock on effects for both the market leader and their customers. If you're not winning, you might console yourself with the fact that at least you're not going bankrupt, but that doesn't negate the advantages conferred by having a strong lead in the market. Therefore, working to establish and maintain that lead is definitely to your benefit.

But yeah, I wasn't saying Sony are assured to cut the price because they gotta win no matter what. But I don't imagine that taking the US this holiday hasn't crossed their minds.
No worries. As you say it could indicate a price drop.

I would say though that the US, whilst an important market, is not the be all and end all of the console market. Sony have made it clear that they are not going with the same strategy that they went with on PS2 and this time they know they can remain the market leader in all markets whilst at the same time not needing to excessively price drop or match competitor price points. That's not to say that Sony don't tailor their offering to each market. Therefore I would expect some amazing offers in the US and UK this year end.

Here are my thoughts on what will happen this holiday-

This year I believe we'll see the Xbox One stay at the $349 price point as an RRP for the holiday season. Microsoft have already dropped the price $150 since launch and whilst it's helped them in the USA during the holiday season, it hasn't much helped them in the US in 2015 or worldwide..... since forever.

I don't think Microsoft will be looking to de-value the console even more, and I don't think they're prepared to have another holiday season where they lose money thanks to another price cut. Microsoft know they have some fairly big hitters like Halo 5 coming out this year and so I am of the opinion that Microsoft will not drop the price (outside of special one off/retailer specific deals) this calendar year. The official price will remain $349.

What I believe Microsoft will do is in a similar fashion to their strategy during 2009 with the Xbox 360. If you remember, Microsoft kept the price the same but bundled in two games at retail. This year I believe we'll see Microsoft start to add value to their proposition by creating more bundles aimed around the $349 and $399 price points with games and perhaps even Xbox Live bundled in at no extra cost to the user.



I made a similar post before about the PlayStation 4 but will now expand. During the PlayStation 2 era Sony had a strategy that was all about being the market leader to show that the PS2 was continuing on from the success of PS1 and that video games were serious business. The PlayStation 2 launched at a low price of $299 and Sony's strategy was to subsidise the console in favour of making bank on software. What this meant was that Sony were more willing to drop the price $100 in May 2002 in order to increase the install base at the detriment of hardware revenue as they knew software revenue would make up the difference.

The gaming landscape has changed recently and from the evidence at hand we can see that the majority of the console gaming market is being driven by early adoptors, hardcore gamers and core gamers. Sony are taking advantage of this with their new strategy, first they got everything right about the console, then they priced it lower than their competitor at a good entry price, third they've been the cumulative leader this gen.

What that means is that Sony's strategy is very much about making a profit both on hardware and software which is very different compared to the PS2 strategy of the time. This is the longest Sony have ever gone without a price drop and that's because the console is still selling very well. They could have done this strategy with the PS2 and it would have done well but with PS2 they were more than happy to sacrifice hardware revenue for a higher install base. With PS4, Sony would prefer to increase hardware revenue, and it's clear that they can with PS4.

We rarely see consoles go this long without a price cut and the only others I can think of that have gone this long were the Wii and Wii U but they are special circumstance really. When it comes to a PS4 price cut I am of the opinion that a price cut must and will take place before the Morpheus launch. Sony will also need to weigh up their options as to whether that price cut will take place before Morpheus launch in 2016 or if they are willing to cut the price in 2015 because it is a hit they can take/have planned for or even will still remain profitable.

This year I am of the opinion that we will see a price cut in order for Sony to open the console up to a new audience and to increase the install base. However I am not sure if it will be a $50 or $100 price cut and whether it will even be temporary during the holiday or permanent. However, Sony do not need to cut the price either and I can very much see them holding back this year and taking the same strategy I mentioned above of Microsoft in 2009. Bundle the crap out of PS4 at the same $399 price point and we are already seeing that with the Destiny bundle.

So Sony really can go both ways here and to be honest they probably don't need to drop the price as the PS4 is doing just fine, however I do think it's time and we will see some sort of price drop this year, at the very least we'll see loads of bundles at $399 with extra value adds.

 
Nov 18, 2013
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Is it known for a fact if either Sony or Microsoft are still selling at a loss at this point?
They never sold at loss if you pay full price. But honestly who does nowerdays?
And discounted plus free stuff added, the bundles should easily go below the red line.
As always, no penny spent yet for marketing, shelf space and whatever.
 
Dec 14, 2010
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It's a US NPD thread. Talking about the US market.
To be fair, PS4's success worldwide does affect the reasons why Sony might drop the price of the PS4 in the US market. At this point, the Xbox One can be seen as a regional competitor to the PS4 and even then, one that is seemingly second even in the region Xbox One can compete in. As such, Sony's main concern with PS4 is making sure the system hits internal sales targets and makes money whereas MS's main concern with Xbox One is remaining relevant enough for third-parties to support. MS has more of a reason to have deals and price drops because Sony is eating their lunch. However, this isn't to say Sony will not have deals and price drops to hit internal sales targets, but it does mean that the PS4 could lose to Xbox One in the US market and still do better than the Xbox One as a whole.
 
Feb 16, 2010
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MS's main concern with Xbox One is remaining relevant enough for third-parties to support.
This is nowhere anywhere in a galaxial vicinity of being a real concern. The architectures are so close that development would continue for both Consoles regardless. (Within reason, of course.) Bigger problem regarding third party support is in making games for Consoles at all.

Agreed, because some people keep thinking that the US market is everything. Which it is not.


We're talking about market positions, go to market strategies and market results for the US market. No one in this conversation thinks that the "US market is everything". But the US market is indeed everything when you are having a conversation specifically about the US market. FFS.
 
Dec 12, 2013
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These quotes are quite old now. Didn't he recently say he does not compare his team's sales numbers to the competition's?
The grapes got sour i guess.

Edit: thanks, ZhugeEX
Doesn't matter when he said it, he said it and was very clear about it.

He needs to keep on top what he's saying because he contradicts himself.

You know what PR is right?
http://m.neogaf.com/showthread.php?t=1095498

Ofc, they all want to sell the most. But they'd also like to make a profit as well. :)
You say it's pr then link me to another pr. lol.
 
Nov 18, 2013
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Doesn't matter when he said it, he said it and was very clear about it.

He needs to keep on top what he's saying because he contradicts himself.
the first statement he gave as relatively fresh head of Xbox. In this situation you cannot say anything else as "we want to win". Getting beaten was the reason to get rid of Mattrick. So the innocent rookie Spencer should make a good first impression.

After a while, when you realise you are still second in the market you had locked down last gen, you start to get a little more of the olympic spirit, obviously. Hope Nadella also thinks that participation is everything.
I would not call this contradiction but adaptation.

Let's hear what they have to say when they win Halo-month.
They will win, right?
 
Nov 13, 2014
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This is nowhere anywhere in a galaxial vicinity of being a real concern. The architectures are so close that development would continue for both Consoles regardless. (Within reason, of course.) Bigger problem regarding third party support is in making games for Consoles at all.





We're talking about market positions, go to market strategies and market results for the US market. No one in this conversation thinks that the "US market is everything". But the US market is indeed everything when you are having a conversation specifically about the US market. FFS.
While I agree, with everything you and ZhugeEx been saying I am not sure some of the people you two "discussing" with understand the difference.

There has been some very broad statements made, especially from Serversurfer.
 
Nov 18, 2013
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We're talking about market positions, go to market strategies and market results for the US market. No one in this conversation thinks that the "US market is everything". But the US market is indeed everything when you are having a conversation specifically about the US market. FFS.
But is this really correct?
I think the behaviour on the US market can heavily be influenced by your ROTW-standing.
If one single market secures your relevance in the industry you might act differently as if you are the big cheese worldwide.
This has been one of the main arguments why Sony will not go all in. Because they don't need to win the US, although it's nice. Microsoft, on the other hand...
 
Aug 10, 2013
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To be fair, PS4's success worldwide does affect the reasons why Sony might drop the price of the PS4 in the US market. At this point, the Xbox One can be seen as a regional competitor to the PS4 and even then, one that is seemingly second even in the region Xbox One can compete in. As such, Sony's main concern with PS4 is making sure the system hits internal sales targets and makes money whereas MS's main concern with Xbox One is remaining relevant enough for third-parties to support. MS has more of a reason to have deals and price drops because Sony is eating their lunch. However, this isn't to say Sony will not have deals and price drops to hit internal sales targets, but it does mean that the PS4 could lose to Xbox One in the US market and still do better than the Xbox One as a whole.
You seriously think that is their main concern? And you think 3rd parties wouldn't support them even if they were more behind? I honestly doubt that very much. Especially since the XB1 is basically just a W10 PC now - porting has never been easier in the history of consoles.

I'm not saying MS doesn't want their console to stay relevant, but I doubt their number one concern is to sell enough to maintain 3rd party support...they're not doing that badly, jesus. They're still ahead of 360 numbers, after all. 3rd parties seemed pretty happy to support that system.

MS number 1 concern is to make money, in the long run. They're likely taking a financial hit (not sure how much) to sell their consoles at a loss, but the idea behind that is to bring you into their ecosystem. Especially as a digital customer.
 
Jul 18, 2014
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You seriously think that is their main concern? And you think 3rd parties wouldn't support them even if they were more behind? I honestly doubt that very much. Especially since the XB1 is basically just a W10 PC now - porting has never been easier in the history of consoles.

I'm not saying MS doesn't want their console to stay relevant, but I doubt their number one concern is to sell enough to maintain 3rd party support...they're not doing that badly, jesus. They're still ahead of 360 numbers, after all. 3rd parties seemed pretty happy to support that system.
Agreed, Xbox One has sold enough to ensure 3rd party support.
 
Dec 12, 2013
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the first statement he gave as relatively fresh head of Xbox. In this situation you cannot say anything else as "we want to win". Getting beaten was the reason to get rid of Mattrick. So the innocent rookie Spencer should make a good first impression.

After a while, when you realise you are still second in the market you had locked down last gen, you start to get a little more of the olympic spirit, obviously. Hope Nadella also thinks that participation is everything.
I would not call this contradiction but adaptation.

Let's hear what they have to say when they win Halo-month.
They will win, right?
So in other words, spin. Got it. :)

Yes I expect a big PR brag for October. But PS4 has a nice variety of games that month that attracts many different types of gamers. So who knows?