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[Another48Hours]

MS and Sony gain nothing from people purchasing 360's and PS3's. Those are dead systems and they would much rather potential customers pick up an XB1/PS4.

They gain free profit.

Let's say just as an example both are $99 and they make $50 profit for each sale, and lets say each sale buys a game so per console that is $75 profit.
$75 x 1 mill is 75 mill, and this isn't including those who buy accessories, more games, or/and buy xbl. So that could be over 100 million dollars in cash.

I mean that's free money.

 

[spatenfloot]

They gain free profit.

Let's say just as an example both are $99 and they make $50 profit for each sale, and lets say each sale buys a game so per console that is $75 profit.
$75 x 1 mill is 75 mill, and this isn't including those who buy accessories, more games, or/and buy xbl. So that could be over 100 million dollars in cash.

I mean that's free money.

No, that's made up numbers.

 

[slavesnyder]

No, that's made up numbers.

And wasted shelf space

 

[Another48Hours]

No, that's made up numbers.

I never said they were real, it's an example.

A price drop could double or triple sales short term. For free cash.

 

[The Mad Draklor]

They gain free profit.

Let's say just as an example both are $99 and they make $50 profit for each sale, and lets say each sale buys a game so per console that is $75 profit.
$75 x 1 mill is 75 mill, and this isn't including those who buy accessories, more games, or/and buy xbl. So that could be over 100 million dollars in cash.

I mean that's free money.

This is all wild guesswork. You don't just throw out random numbers and base your conclusions on those.

 

[Vena]

Right. You can do a small initial ship and then replenish heavily once the fiscal quarter's closed.

So, then, does Nintendo just not care or are handheld games lower volume and/or exceptions? Mario&Luigi and FE:Explorers are tail end of January in the states, no? And the former, at least, will likely sell a "relevant" amount (and is Japanese).

 

[Another48Hours]

This is all wild guesswork. You don't just throw out random numbers and base your conclusions on those.

It's not guess work, it's an example, as I clearly stated in the post, the numbers were never real.

 

[allan-bh]

MS and Sony gain nothing from people purchasing 360's and PS3's. Those are dead systems and they would much rather potential customers pick up an XB1/PS4.

Potential customers of a Xbox 360 or PS3 are very different from people looking for a Xbox One or PS4. Microsoft and Sony can work on both fronts.

Sony probably don't have room for a cheap PS3, but Microsoft should do that in a final push for 360.

 

[CosmicQueso]

So, then, does Nintendo just not care or are handheld games lower volume and/or exceptions? Mario&Luigi and FE:Explorers are tail end of January in the states, no? And the former, at least, will likely sell a "relevant" amount (and is Japanese).

I don't know what Nintendo cares about.

Nothing is an exception. All buys go against a buyer's open-to-buy budget and inventory measure.

Speculation, but since Nintendo's products are more evergreen, with less up front demand than 3rd party AAA games, perhaps a low initial buy doesn't phase them since they know they'll still be getting the full price for that 3DS game 3 years from now?

 

[Orgen]

2005? Why not look at games from the 80s while we're at it. Talking recent history here dude, not a different geological epoch.

Hahaha...



PS: Interesting tidbit about retailer's fiscal years ending in January, I didn't know about that. Anyway I don't think Paper Jam or FF:Explorers will have a large supply for their launch

 

[The Mad Draklor]

It's not guess work, it's an example, as I clearly stated in the post, the numbers were never real.

You're suggesting that there is plenty of "free money" on the table. What's the point of giving an example of fake numbers if you are conscious of the fact that it isn't reality?

 

[maxcriden]

Did NDP_M leave us already?

 

[Another48Hours]

You're suggesting that there is plenty of "free money" on the table. What's the point of giving an example of fake numbers if you are conscious of the fact that it isn't reality?

This post is grasping at straws and says nothing. The example is that it gives them profit. Doesn't matter if the numbers are fake, the theme is the same
wtf do you think they are selling both now for?

Read another users post on this a few posts up.

 

[The Mad Draklor]

This post is grasping at straws and says nothing. The example is that it gives them profit. Doesn't matter if the numbers are fake, the theme is the same
wtf do you think they are selling both now for?

Read another users post on this a few posts up.

Just like your previous comment? How can your example support your position if the numbers were made up, as you have admitted?

If you do not have a better alternative argument, then you might as well stop posting. If you claim a positive, you need to back it up with evidence.

 

[slavesnyder]

Just like your previous comment? How can your example support your position if the numbers were made up, as you have admitted?

If you do not have a better alternative argument, then you might as well stop posting. If you claim a positive, you need to back it up with evidence.

I think / hope you misunderstood. He admitted that his numbers were made up, but he wanted to put down his line of thinking:
Making the old consoles cheap as hell, sell some games and make profit, easy money.
I guess this is something they try anyway, but BOM+handling+retail share does not allow too low prices if you are aiming for 50$ profit/console.
So: nothing to bash, just not such a hot idea.

 

[The Mad Draklor]

No disrespect but you're full of crap here, my position is that it makes money, and it's irrefutable that that's why both are selling the consoles now. You have zero content in your post.

LMAO, ironic post of the thread.

Why would you cut the price to get less money, especially when both the PS3 and 360 are basically dead? If the price is cut, then sales will need to increase dramatically to make a better return than not cutting the price.

 

[Another48Hours]

I think / hope you misunderstood. He admitted that his numbers were made up, but he wanted to put down his line of thinking:
Making the old consoles cheap as hell, sell some games and make profit, easy money.
I guess this is something they try anyway, but BOM+handling+retail share does not allow too low prices if you are aiming for 50$ profit/console.
So: nothing to bash, just not such a hot idea.

I think they can do it with $99 and the euro equal to that. But it would as I said likely work omly short term. Maybe give each console an extra 6 months to a year as retailers start discontinuing.

 

[Another48Hours]

LMAO, ironic post of the thread.

Why would you cut the price to get less money, especially when both the PS3 and 360 are basically dead? If the price is cut, then sales will need to increase dramatically to make a better return than not cutting the price.

You seem to have forgotten games, Kinect, move, xbl and psn etc, that add to the profit.

And for some reason based on this post believe buyers will buy a console to stare at their console on a table.


Truth is those above, will likely have a good increase short-term for a bit as I said above. Along with the profit and boost from the price cut, would be free money.

 

[slavesnyder]

I think they can do it with $99 and the euro equal to that. But it would as I said likely work omly short term. Maybe give each console an extra 6 months to a year as retailers start discontinuing.

I think we can argue back and forth now. You think it's a good idea, me not. We have no hard numbers, only beliefs. Let's put this aside.
Worst case would be to pull in, confuse and madden more users.

P.S.: PS2 was ass cheap at the end(99$), but this was because of HW revisions and really low BOM, plus an enormous library and tons of assessories that could generate extra money (singstar mics, buzz buzzers).
PS3 is not in this position, neither from the machine itself, nor from the library. Plus, PS4 is not so much more expensive. It's just not worth it.
Xbox is not much different.

Good night.

 

[Stumpokapow]

Did NDP_M leave us already?

NDP_Mulcair was banned for being a re-registration of a previously permanently banned member. This is the last post in this thread on the subject.

 

[Another48Hours]

I think we can argue back and forth now. You think it's a good idea, me not. We have no hard numbers, only beliefs. Let's put this aside.
Worst case would be to pull in, confuse and madden more users.

P.S.: PS2 was ass cheap at the end(99$), but this was because of HW revisions and really low BOM, plus an enormous library and tons of assessories that could generate extra money (singstar mics, buzz buzzers).
PS3 is not in this position, neither from the machine itself, nor from the library. Plus, PS4 is not so much more expensive. It's just not worth it.
Xbox is not much different.

Good night.

Uh you do realize me and you never had an argument right?

Anyway have a good night.

 

[CosmicQueso]

The 360 did close to 200k this holiday using your numbers. Including the rest of the year assuming it sold 25-60k range od say it was close to 500k the whole year.

A $99 price for the non-gimped 360 or less, for most of the year, along with the deals for Nov and Dec, I can see 1 million.

Ps3 I could see 500k, though the reduced retail presense may cause that to be harder to reach, I forgot some stores dropped the ps3.

I hear what you're saying. $99 means around $85 wholesale assuming a slim retail margin. Gets you to mfg cost of goods number around, I dunno, let's call it $50 (maybe more, maybe less), at a slim mfg margin (definitely not $50/unit). Can that box be built for $50? Not sure.

On top of that, the first party would have to price protect the existing channel stock. So, every retailer would get some $ amount per unit for every Xbox 360 and PS3 they have in stock. A pretty pricey *ba dum dum* proposition.

Finally, you have the element of price anchoring to consider. Basically, by keeping the old box at a relatively high retail price, it has the effect of making the new boxes seem cheaper. Right now, you can get the Forza Horizon 2 500GB bundle at Best Buy for $199.99. You can also get the GoW Xbox One bundle for $349.99.

So, the consumer could look at this and say... "For $200 I can get the old box. But oh wow, for only $150 more I can buy the brand new box instead of the old one? That's not a bad upgrade price".

Now if that Xbox 360 was $99.99? "Oh man, that Xbox One bundle is $250 more? Forget that, I'll stick with the $100 version".

One of the potential causes of the very strong next gen adoption rate is that the old consoles were priced higher at this point than in previous generations.

Just saying, these guys likely have strong strategic or budgetary reasons for not going $99.99.

Your argument makes sense but I don't think the target market for Xbox 360 right now is made by people that will pay $150 more for have a Xbox One.

I think you're missing the point a little bit. All the digital revenues, the DLC, and the new game royalties are all on Xbox One. One new Xbox One owner is worth more over the next 5 years than a multiple of Xbox 360 owners, who will likely buy software used or at low cost new, won't buy a lot of digital DLC or games, etc. If by price anchoring you get a fraction of potential Xbox 360 buyers to the Xbox One, you're making more money over the coming years.

Look at Sony, which is basically leaving PS3 on the vine. No real bundles, no promotion... if people want to buy one, well that's fine, but they're certainly not pushing PS3.

In my mind, neither mfg is pushing old gen development or promotion in any meaningful way. They want people to adopt the new stuff, and if that comes at the expense of some sales of the old stuff, fine.

 

[allan-bh]

I hear what you're saying. $99 means around $85 wholesale assuming a slim retail margin. Gets you to mfg cost of goods number around, I dunno, let's call it $50 (maybe more, maybe less). Can that box be built for $50? Not sure.

On top of that, the first party would have to price protect the existing channel stock. So, every retailer would get some $ amount per unit for every Xbox 360 and PS3 they have in stock. A pretty pricey *ba dum dum* proposition.

Finally, you have the element of price anchoring to consider. Basically, by keeping the old box at a relatively high retail price, it has the effect of making the new boxes seem cheaper. Right now, you can get the Forza Horizon 2 500GB bundle at Best Buy for $199.99. You can also get the GoW Xbox One bundle for $349.99.

So, the consumer could look at this and say... "For $200 I can get the old box. But oh wow, for only $150 more I can buy the brand new box instead of the old one? That's not a bad upgrade price".

Now if that Xbox 360 was $99.99? "Oh man, that Xbox One bundle is $250 more? Forget that, I'll stick with the $100 version".

Just saying, these guys likely have strong strategic or budgetary reasons for not going $99.99.

Your argument makes sense but I don't think the target market for Xbox 360 right now is made by people that will pay $150 more for have a Xbox One.

 

[Another48Hours]

I hear what you're saying. $99 means around $85 wholesale assuming a slim retail margin. Gets you to mfg cost of goods number around, I dunno, let's call it $50 (maybe more, maybe less), at a slim mfg margin (definitely not $50/unit). Can that box be built for $50? Not sure.

On top of that, the first party would have to price protect the existing channel stock. So, every retailer would get some $ amount per unit for every Xbox 360 and PS3 they have in stock. A pretty pricey *ba dum dum* proposition.

Finally, you have the element of price anchoring to consider. Basically, by keeping the old box at a relatively high retail price, it has the effect of making the new boxes seem cheaper. Right now, you can get the Forza Horizon 2 500GB bundle at Best Buy for $199.99. You can also get the GoW Xbox One bundle for $349.99.

So, the consumer could look at this and say... "For $200 I can get the old box. But oh wow, for only $150 more I can buy the brand new box instead of the old one? That's not a bad upgrade price".

Now if that Xbox 360 was $99.99? "Oh man, that Xbox One bundle is $250 more? Forget that, I'll stick with the $100 version".

One of the potential causes of the very strong next gen adoption rate is that the old consoles were priced higher at this point than in previous generations.

Just saying, these guys likely have strong strategic or budgetary reasons for not going $99.99.

I think your $199.99 is a typo.

I get what your saying, especially the "I can get this for x more" argument.

But I feel we are I'm this fen deep enough that it won't really have much impact.

The ps3 and 360 could do 99 and get profit from the console, games, psn and xbl, acessories etc.


It'll keep the ps3 and 360 selling 2015 we numbes for another year at best.

Remember I'm thinking short term, 6 months to a tear right before pulling the consoles out.

 

[The Mad Draklor]

You seem to have forgotten games, Kinect, move, xbl and psn etc, that add to the profit.

And for some reason based on this post believe buyers will buy a console to stare at their console on a table.

Truth is those above, will likely have a good increase short-term for a bit as I said above. Along with the profit and boost from the price cut, would be free money.

If the boost in hardware sales are miniscule, then the boost in software and peripheral sales will also be miniscule. With gamers increasingly moving onto the current gen (and with the price gap of current gen and last gen consoles decreasing), Sony and MS will likely end up with less profits if they cut the price rather than not. Also, BC on the XB1 also reduces the incentive to buy a 360 and the PS3 is pretty much dead in the US. At this point of this gen, if Move sales increase, they will likely be attributed to PSVR, not the PS3.

 

[CosmicQueso]

I think your $199.99 is a typo.

Certainly isn't.

I get what your saying, especially the "I can get this for x more" argument.

But I feel we are I'm this fen deep enough that it won't really have much impact.

Then why do it?

The ps3 and 360 could do 99 and get profit from the console, games, psn and xbl, acessories etc.

Not if you're paying out loads of price protection on existing stock, and not if you don't believe you actually will get meaningful digital or accessories sales.

It'll keep the ps3 and 360 selling 2015 we numbes for another year at best.

But why would you want to do that if the real prize is on the new gen?

Remember I'm thinking short term, 6 months to a tear right before pulling the consoles out.

Then it would make even less sense.

 

[RexNovis]

Doesn't matter if the numbers are fake, the theme is the same.

You are in a SALES thread. Numbers are literally the point of this thread. So of fucking course it matters if you just made up random numbers.

If you want to discuss the profit potential for a price drop on last gen consoles thats perfectly fine but dont make up random numbers and expect people to be ok with that in a thread where numbers are highly scrutinized.

 

[Shenmue]

I think your $199.99 is a typo.

I get what your saying, especially the "I can get this for x more" argument.

But I feel we are I'm this fen deep enough that it won't really have much impact.

The ps3 and 360 could do 99 and get profit from the console, games, psn and xbl, acessories etc.


It'll keep the ps3 and 360 selling 2015 we numbes for another year at best.

Remember I'm thinking short term, 6 months to a tear right before pulling the consoles out.

Would they though?

When you go to $99 I feel like a large part of the audience you are attracting are going to be the type that go to their local gamestop and buy really cheap, 8 year old used PS3/360 games to play.

I mean first of all it's not like there are even that many brand new games releasing at this point for the last gen twins. Also if I paid $99 for a console that's like a decade old, the available catalog of titles is ridiculously huge now, and the majority of those games aren't even available to purchase new anymore.

 

[gundamkyoukai]

There is no way in hell Sony can get PS3 down to $99 and make profit ( don't even think at $199 they can )
You are looking at 2 types of very old ram , Cell that they won't waste time with and everything else.
Plus they won't be making huge amounts so no saving there .
Also unlike like PS4 you don't have to pay to play online on PS3 which is not a plus for them .
Add in other points from CosmicQueso and Sony winning this gen and you can see why they won't waste there time with PS3.

 

[Steverulez]

You are in a SALES thread. Numbers are literally the point of this thread. So of fucking course it matters if you just made up random numbers.

I don't see why just because we are in a sales thread people can't discuss hypothetical situations... unless MS and Sony want to give us the costs of all the components and a whole bunch of other things then it would probably kill a ton of conversation.

Cosmic did a great breakdown above of the potential situation if you want to see why its a perfectly reasonable thing to discuss. You seem a bit too eager to swear at the chap tbh.

 

[CosmicQueso]

Nevermind.

 

[allan-bh]

I think you're missing the point a little bit. All the digital revenues, the DLC, and the new game royalties are all on Xbox One. One new Xbox One owner is worth more over the next 5 years than a multiple of Xbox 360 owners, who will likely buy software used or at low cost new, won't buy a lot of digital DLC or games, etc. If by price anchoring you get a fraction of potential Xbox 360 buyers to the Xbox One, you're making more money over the coming years.

Look at Sony, which is basically leaving PS3 on the vine. No real bundles, no promotion... if people want to buy one, well that's fine, but they're certainly not pushing PS3.

In my mind, neither mfg is pushing old gen development or promotion in any meaningful way. They want people to adopt the new stuff, and if that comes at the expense of some sales of the old stuff, fine.

I just don't see people that want a cheap Xbox 360 right now buying a Xbox One. Different customer profiles.

PS3 is probably too expensive to make so Sony is letting die, Microsoft on the other hand could push more, I saw that 4GB model is selling for $159 and 500GB for $199. That's very high for a 2005 system.

 

[CosmicQueso]

I just don't see people that want a cheap Xbox 360 right now buying a Xbox One. Different customer profiles.

Hmmm. I don't think I stated my point clearly enough, because I'm not disagreeing with you.

Price anchoring.

So, which is more appealing:

Scenario 1 - Company A makes a new phone. Prices it at $149. No other options are available.

Scenario 2 - Company A makes a new phone with two versions. Prices one version at $399 that has some extra storage space and a unique color. It also launches another version at $199. Guts are basically the same.

Now both the Scenario 1 phone at $149 and the Scenario 2 phone at $199 are the same exact phone.

Which phone price feels like a bigger bargain? The $149 phone, with $149 being the top of the line price? Or the $199 phone, $200 cheaper than the top of the line $399 version?

Same goes the other way.

If you're a new gen console buyer, having a high priced old gen box on the shelf next to the new gen box makes the new gen box seem less expensive than if the gap were bigger.

This seems like an okay explanation given it's a random link from google.

Here's another one.

When Steve Jobs introduced the iPad, he showed off its high-resolution screen, touted its revolutionary features, and said things like “boom!” and “wow!” a lot. But that wasn’t what made the crowd go wild.

“What should we price it at?” asked Jobs. “If you listen to the pundits, we’re going to price it at under $1000, which is code for $999.” He put a giant “$999” up on the screen and left it there for ages before finally going on. “I am thrilled to announce to you that the iPad pricing starts not at $999,” said Jobs, “but at just $499.” On-screen, the $999 price was crushed by a falling “$499.”

Showmanship? Sure. But this stuff works. It’s called the anchoring effect, and it’s been well understood by psychologists for decades. Marketers use it against you all the time

Just saying, there are good reasons for old gen boxes to be priced high if you're trying to push new gen boxes and make them look not as expensive.

 

[Another48Hours]

If the boost in hardware sales are miniscule, then the boost in software and peripheral sales will also be miniscule. With gamers increasingly moving onto the current gen (and with the price gap of current gen and last gen consoles decreasing), Sony and MS will likely end up with less profits if they cut the price rather than not. Also, BC on the XB1 also reduces the incentive to buy a 360 and the PS3 is pretty much dead in the US. At this point of this gen, if Move sales increase, they will likely be attributed to PSVR, not the PS3.

First of I wasn't only talking about the u.s.

Also your logic of console sales being Miki equaling the other beingmiiscule doesn't work.


The rest are nitpicks. The data welfare posted had the Xbox one selling almost 200k alone only for Nov and Dec, rite ps3 likely did near the same or more. Games from both still make it on charts.

Doubling both numbers or more would give each maker tons of money off all those add one along with the console. Again as I said, it would only work short term

Your points only make sense if I was saying they could both outsell the Wii or sell as much as the ps2, or sell decently for another 2-3 years. I never said that. Remember, both Ms and Sony stated both consoles may end this year. So dropping to 99 for the rest of the year, maybe adding a fee more months is low risk for the possibility of great last second profit.

 

[Another48Hours]

You are in a SALES thread. Numbers are literally the point of this thread. So of fucking course it matters if you just made up random numbers.

If you want to discuss the profit potential for a price drop on last gen consoles thats perfectly fine but dont make up random numbers and expect people to be ok with that in a thread where numbers are highly scrutinized.

Read Snyder's post at te start of this page to understand what I was doing, thank you.

 

[allan-bh]

Hmmm. I don't think I stated my point clearly enough, because I'm not disagreeing with you.

Price anchoring.

So, which is more appealing:

Scenario 1 - Company A makes a new phone. Prices it at $149. No other options are available.

Scenario 2 - Company A makes a new phone with two versions. Prices one version at $399 that has some extra storage space and a unique color. It also launches another version at $199. Guts are basically the same.

Now both the Scenario 1 phone at $149 and the Scenario 2 phone at $199 are the same exact phone.

Which phone price feels like a bigger bargain? The $149 phone, with $149 being the top of the line price? Or the $199 phone, $200 cheaper than the top of the line $399 version?

Same goes the other way.

If you're a new gen console buyer, having a high priced old gen box on the shelf next to the new gen box makes the new gen box seem less expensive than if the gap were bigger.

I see, you are looking at the angle of people that want a new gen console, in that scenario they look more affordable.

I was looking in the other way, people that want a old gen console, so doesn't matter if the new is "just" $150 more, that's still a lot.

 

[Another48Hours]

Would they though?

When you go to $99 I feel like a large part of the audience you are attracting are going to be the type that go to their local gamestop and buy really cheap, 8 year old used PS3/360 games to play.

I mean first of all it's not like there are even that many brand new games releasing at this point for the last gen twins. Also if I paid $99 for a console that's like a decade old, the available catalog of titles is ridiculously huge now, and the majority of those games aren't even available to purchase new anymore.

I agree with you in some areas. But ps3 and 360 games we still have ew games chart and older but not preowned games charting or selling decent. A short term drop to 99 imo before both are pulled seems to me like a low risk situation to gain some profit.

 

[The Mad Draklor]

First of I wasn't only talking about the u.s.

Also your logic of console sales being Miki equaling the other beingmiiscule doesn't work.

The rest are nitpicks. The data welfare posted had the Xbox one selling almost 200k alone only for Nov and Dec, rite ps3 likely did near the same or more. Games from both still make it on charts.

Doubling both numbers or more would give each maker tons of money off all those add one along with the console. Again as I said, it would only work short term

Your points only make sense if I was saying they could both outsell the Wii or sell as much as the ps2, or sell decently for another 2-3 years. I never said that. Remember, both Ms and Sony stated both consoles may end this year. So dropping to 99 for the rest of the year, maybe adding a fee more months is low risk for the possibility of great last second profit.

What made you think I was only talking about the US? I just said that the PS3 is pretty much dead in the US. I bet that the 360 is dead in the same manner in Europe.

And how were those 200K holiday season sales achieved? Were they achieved at regular price or with a massive discount? How much would sales increase if the discount was bigger? If you came up with a number after reading this question, how do you know?

Your closing conclusion also makes zero sense. If the PS3 and 360 production may end this year, then why cut the price when the remaining supply will run out regardless? It may take longer if the price isn't cut, but selling out the remaining supply without a price cut yields more profits than selling out the remaining supply with a price cut.

Overall, you're literally just repeating the same assertions, which is a very flawed and fallacious way to sell your argument. Complaining that my counterarguments are nitpicks is also not a valid argument. If there are very few people buying last gen consoles, then software sales will not increase that much. Why? Because there won't be that many people to buy the software. It is simple logic, something that you apparently lack.

 

[Another48Hours]

What made you think I was only talking about the US? I just said that the PS3 is pretty much dead in the US. I bet that the 360 is dead in the same manner in Europe.

And how were those 200K holiday season sales achieved? Were they achieved at regular price or with a massive discount? How much would sales increase if the discount was bigger? If you came up with a number after reading this question, how do you know?

Your closing conclusion also makes zero sense. If the PS3 and 360 production may end this year, then why cut the price when the remaining supply will run out regardless? It may take longer if the price isn't cut, but selling out the remaining supply without a price cut yields more profits than selling out the remaining supply with a price cut.

Overall, you're literally just repeating the same assertions, which is a very flawed and fallacious way to sell your argument. Complaining that my counterarguments are nitpicks is also not a valid argument. If there are very few people buying last gen consoles, then software sales will not increase that much. Why? Because there won't be that many people to buy the software. It is simple logic, something that you apparently lack.

Keep up the insults, your aggressive approach only makes you look more unintelligent.

Your whole post once again goes back to "consoles only" but you're so fool of yourself you don't realize it, not one thing you written refutes my point. You also act as if you factually know what would happen but you dnt, possibility is a term that works both ways.

Yes, if they cut the price, they would gain less profit, but again you ignore games, Kinect, move, xbl, psn, accessories etc. Btw a lot of those are already in stores likely sitting their on sold, so again ts free cash.

The ps3 and 360 still do decent numbers, and their holidays likely were not that far from wii u ww. New games or older games brought new still chart so yes there are still buyers, a lot of the above are sitting in stores and don't need shipments either so all they need to do on their end is cut the price, no real work.

Again, it's low risk for the possibility of gaining greater profit. Also, there's possibly a decent market waiting for both to finally be at $99.

 

[Liabe Brave]

A short term drop to 99 imo before both are pulled seems to me like a low risk situation to gain some profit.

It is almost certain that you're incorrect. Using grounded estimates instead of hypotheticals, CosmicQueso posited that a price cut to $99 would require sales to more than double just to maintain the same level of profit per unit sold. That's before even accounting for price protection payments.

It also doesn't address the multiple opportunity costs both previously mentioned and not:
• Loss of new-gen conversion due to price anchoring
• Higher percentages of used game sales, leading to lower royalties collected per user
• Costs of extra shelf and warehousing space within distribution channels
• Devaluing the costs of continued development on the Xbox One's 360 emulator, as well as reduced future sales of digital downloads (whuch retain value much longer than physical copies)
• New users to the ecosystem may become long-term account holders, but you're pushing their conversion to the newest device deeper into the gen, thus repeating many of the above costs in the One's later years

The move would not be low-risk either, considering the need to extend/expand component supplier and assembly contracts, and the potential for returns of over-projected unsold stock.

In other words, a price cut on 360 is very, very far from "free money". They'd likely have to increase sales much more than is realistic in order to see any extra money at all.

(That doesn't mean they won't ever cut the price, though.)

 

[Another48Hours]

It is almost certain that you're incorrect. Using grounded estimates instead of hypotheticals, CosmicQueso posited that a price cut to $99 would require sales to more than double just to maintain the same level of profit per unit sold. That's before even accounting for price protection payments.

It also doesn't address the multiple opportunity costs both previously mentioned and not:
• Loss of new-gen conversion due to price anchoring
• Higher percentages of used game sales, leading to lower royalties collected per user
• Costs of extra shelf and warehousing space within distribution channels
• Devaluing the costs of continued development on the Xbox One's 360 emulator, as well as reduced future sales of digital downloads (whuch retain value much longer than physical copies)
• New users to the ecosystem may become long-term account holders, but you're pushing their conversion to the newest device deeper into the gen, thus repeating many of the above costs in the One's later years

The move would not be low-risk either, considering the need to extend/expand component supplier and assembly contracts, and the potential for returns of over-projected unsold stock.

In other words, a price cut on 360 is very, very far from "free money". They'd likely have to increase sales much more than is realistic in order to see any extra money at all.

(That doesn't mean they won't ever cut the price, though.)

See everything you said would be correct but things like shelf space etc ae not factors.

The new games and tons of old games that are sold new at reduced price are on shelves NOW.

Kinect 1.0s and MOVE are on shelves NOW

Xbl and PSN are in stores NOW


Tons of accessories for both are in stores NOW.

What are they shipping? What additional space? They are selling what's been sitting in stores, the most that may happen is if both sell more than expected they may send a small shipment to replenish.

That's why I say its low risk because everything for the most part is already in stores.

 

[CosmicQueso]

It's a fun topic to consider for sure.

Ultimately, a lot of very smart people are paid a whole lot of money to find ways of making more money for the console mfgs.

I'm sure this thread isn't the only place a $99.99 SRP console idea is being thrown out there.

The fact we haven't seen it yet suggests there are plenty of major hurdles to get there, and that the answer certainly is not a simple one!

 

[Steverulez]

It's a fun topic to consider for sure.

Ultimately, a lot of very smart people are paid a whole lot of money to find ways of making more money for the console mfgs.

I'm sure this thread isn't the only place a $99.99 SRP console idea is being thrown out there.

The fact we haven't seen it yet suggests there are plenty of major hurdles to get there, and that the answer certainly is not a simple one!

I feel like the time for a much cheaper 360 revision has probably gone... they could have done it in 2013 if they wanted as they went into this generation, get people into Xbox and then try to get them to upgrade to Xbox One later but in 2016... its probably too late now?

 

[The Mad Draklor]

That's why I say its low risk because everything for the most part is already in stores.

So... you're basically saying Sony and Microsoft already made their money because those products are already shipped. However, for them to make anymore profits, those products need to get off the shelves at a fast enough pace to warrant more shipments.

You have been positing that a $99 pricetag will cause a significant boost in hardware and software. However, if it was so obvious as you were making it out, then this would have already happened. It may be already too late because we are over 2 years into this gen. For the PS3, some of its best games have been/are being remastered for the PS4 such as the Uncharted series, The Last of Us, God of War III, and Valkyria Chronicles. For the XB1, it has backwards compatibility for certain 360 games.

And in response to your response to my previous comment, I have not ignored games, accessories, and such. In fact, you basically ignored my previous comments and jumped the gun. I mentioned the XB1's BC earlier, which you have clearly forgotten, for instance. The PS Move is compatible with PSVR. It has found another purpose other than being a Wiimote clone. Kinect 1.0 has been extremely quiet and I doubt it is doing any significant numbers. You claim that the PS3 and 360 are close to the Wii U worldwide, but do you have citations for that claim? Media Create numbers show that the PS3 and Wii U aren't close at all.

Overall, your claims are based on your feelings, rather than empirical evidence. You need to show proper citations, show trends that show that PS3 and 360 are still viable and a price drop can yield bigger profits. You haven't done any of that the entire time.

 

[Liabe Brave]

See everything you said would be correct but things like shelf space etc ae not factors. ...What are they shipping? What additional space?

The consoles themselves. Retailers keep a certain number of days' worth of stock on hand, so if the sales volume increases, the number of consoles they carry goes up. For larger retailers like Wal-Mart, that typically doesn't mean more units in their stores. They get resupplied from regional distribution centers on a very regular basis, so the stock is stored in the DCs. This is an opportunity cost, since those DCs could be storing items with higher profit density. This leads to pushback from the retailer, spacing out POs (sometimes even embracing the risk of stockouts).

For retailers with less floor space per location like Gamestop, higher volumes can lead to the need for more deliveries, which means higher transportation costs (or higher payments to their 3PL server).

Also, I note that you said "things like shelf space etc", but then only presented a argument against shelf space. There are many other factors I mentioned that make a 360 price cut less useful than you've posited...and even so, all of what I said comes after the need to more than double sales just to break even on profit.

In short, I simply don't feel your argument has much to recommend it.

 

[OléGunner]

Reading the last page of this thread, makes no sense retailers/console manufacturers would push PS360 and it's various accessories like Kinect when higher profit margin new consoles can be sold.

And as Liabe Brave says, retail space is tight, Sony have PSVR to sell which is hard enough, and I don't think there's a desire by anyone to go into supplying low profit yield electronic goods.

Might as well leave the old gen at the same price for those in the market for one and push PS4/XB1 which provides way more profit through PSN, DLC and software purchases over a longer period of time.

 

[unapersson]

They gain free profit.

Let's say just as an example both are $99 and they make $50 profit for each sale, and lets say each sale buys a game so per console that is $75 profit.
$75 x 1 mill is 75 mill, and this isn't including those who buy accessories, more games, or/and buy xbl. So that could be over 100 million dollars in cash.

I mean that's free money.

But there's also an absolute glut of cheap second hand games, much cheaper now that the current gen consoles have been out for a few years. The chance of selling new software will have diminished a lot.

 

[mo60]

Mario Kart 8 will end at >8 million lifetime.

The only Japanese game which is gonna outsell it is Metal Gear Solid V.
And i doubt that even Games like Smash Bros, Splatoon, Mario Bros U, Mario 3DWorld, Mario Maker, and Nintendo Land will be topped.
Those games are gonna sell between 5 and 7 million Lifetime.

Mario Kart 8 is probably near 6.5 million(maybe even well above that) right now including digital(I don't know how high digital attach rates are on the nintendo eshop for wiiu games like Mario Kart 8). If you are correct mario kart 8 won't be the worst selling console Mario Kart game.I find it kinda weird how the game actually has the potential to sell 8 million copies on a console that has sold sub 20 million units. If the install base got to wii levels again on a future nintendo console I would not be surprised if a future mario kart game sold like 30 million copies again.

 

[Vena]

Mario Kart 8 is probably near 6.5 million right now including digital(I don't know how high digital attach rates are on the nintendo eshop for wiiu games like Mario Kart 8). If you are correct mario kart 8 won't be the worst selling console Mario Kart game.

Isn't that already the case?

 

[mo60]

Isn't that already the case?

Probably still has to beat double dash if it did not already. It beat mario kart super circuit awhile ago.