Microsoft is gearing up for something BIG tonight and tomorrow night **Xbox Elite Confirmed $479 April 29th**

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BornStar

Diamond Member
Oct 30, 2001
4,052
1
0
Originally posted by: BigJ
If they sacrificed profit today, they could essentially crush Sony right now and it would probably result in greater long term profits.

If the Elite was $400, you throw in the HD DVD drive to get $600. For the same price as the 60gb PS3, you have a system with a vastly superior game library, better online play, larger hard drive, and some great features around the corner (like IPTV). Not only would this dissuade people from buying the PS3, but it would result in even less exclusives for the PS3. Sony would be pretty much dead in this generation of the console wars.

Instead, they choose to price themselves right along the PS3, where to people considering a system in this price range, the PS3 looks like a better deal. Home is coming out in the fall, and in the mean time the PS3's library is greatly expanding. It's just a dumb move on MS's part.

To add to that, BR is pulling away right now over HD DVD, and keeping the PS3 competitive is only going to help. There's a reason why BR made such great leaps in terms of market penetration and disc sales once the PS3 was released.
While I don't have answers to all of your points, I would first of all like to mention that I'm sure Microsoft has done extensive research on this point and has determined that it's in their best interest not to drop the price. Also, the advantages you mention at a $600 price point (Elite+HD DVD) are still advantages at the $679 price point.

Around the same time Home comes out for the PS3, Halo 3 comes out for the 360 which will be huge for the console. At this point I expect Microsoft to ride the Halo 3 launch out with their current prices and then reduce after the holiday season is over. It makes the most sense for them.

I think one final thing you have to look at is Microsoft as a whole. Microsoft is a company with extremely deep pockets that has to be careful in everything they do. They have enough money to just about hand out consoles to everyone that wants one and attempt to gain the expense back through games and peripherals. You can bet that if they were to do that they would get hit with one antitrust lawsuit after another. Sure, they could crush Sony at this point but a lot of courts would probably see that as anti competitive.
 

ElFenix

Elite Member
Super Moderator
Mar 20, 2000
102,357
8,446
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Originally posted by: Agentbolt
the way 360 units are selling there isn't much of a point to doing a price drop right now. if sales were slowing down they might do it, but they're not. they outsold the PS3 by 100,000 units last month.

Sony's sales numbers ARE NOT STRICTLY DEFINED BY THE PS3. Guess which console outsold BOTH the 360 and PS3? People are buying the PS2 because it is cheaper. You need to take a broader view if you want to argue your point well.

i really don't. MS doesn't see the PS2 as a threat to the home PC (and windows) anymore. now, all those PS2 games create some incentive for people to buy PS3, but not much seeing as how a) presumably those people already have PS2s, and b) PS3's backwards compatibility has reported problems (and the hardware will get dropped in the first revision).

not to mention, see my edit.
 

Agentbolt

Diamond Member
Jul 9, 2004
3,340
1
0
I did read your edit. I don't have any data to back up my argument, which would be that 1.5 years into the console's life cycle, when other newer consoles are on the market as well and any one of them could easily end up being the #1 console, is not the best time to be focusing on making a profit on the console AND the software/peripherals. Just like you have no data to indicate WHEN in a console's life cycle they generally start making a profit. Without hard data to back it up, any argument we'd have on that subject is pointless.

Micosoft's goal is to sell 360's. Who on earth is talking about the PS2 threatening the home computer? That is a complete straw-man argument. Microsoft is not going to sell as many 360's as they would if people weren't buying the PS2 in droves because it is so cheap compared to the next-gen consoles.

Your argument that "sales are not slowing down" misses the point as well. Microsoft has not met any of it's stated goals of sold consoles in the past year. Sales aren't slowing because they really just haven't been that good to begin with.

edit: saw your other edit. The PS2 isn't dead because a good game just came out? Care to point to another large release on the horizon? Maybe the PS2 wasn't dead when GoW2 was still on the horizon, but now that there's nothing upcoming... seems pretty dead to me. We can split hairs on the technical definition of "dead" all you want.
 

BigJ

Lifer
Nov 18, 2001
21,330
1
81
Originally posted by: BornStar18
Originally posted by: BigJ
If they sacrificed profit today, they could essentially crush Sony right now and it would probably result in greater long term profits.

If the Elite was $400, you throw in the HD DVD drive to get $600. For the same price as the 60gb PS3, you have a system with a vastly superior game library, better online play, larger hard drive, and some great features around the corner (like IPTV). Not only would this dissuade people from buying the PS3, but it would result in even less exclusives for the PS3. Sony would be pretty much dead in this generation of the console wars.

Instead, they choose to price themselves right along the PS3, where to people considering a system in this price range, the PS3 looks like a better deal. Home is coming out in the fall, and in the mean time the PS3's library is greatly expanding. It's just a dumb move on MS's part.

To add to that, BR is pulling away right now over HD DVD, and keeping the PS3 competitive is only going to help. There's a reason why BR made such great leaps in terms of market penetration and disc sales once the PS3 was released.
While I don't have answers to all of your points, I would first of all like to mention that I'm sure Microsoft has done extensive research on this point and has determined that it's in their best interest not to drop the price. Also, the advantages you mention at a $600 price point (Elite+HD DVD) are still advantages at the $679 price point.

Around the same time Home comes out for the PS3, Halo 3 comes out for the 360 which will be huge for the console. At this point I expect Microsoft to ride the Halo 3 launch out with their current prices and then reduce after the holiday season is over. It makes the most sense for them.

I think one final thing you have to look at is Microsoft as a whole. Microsoft is a company with extremely deep pockets that has to be careful in everything they do. They have enough money to just about hand out consoles to everyone that wants one and attempt to gain the expense back through games and peripherals. You can bet that if they were to do that they would get hit with one antitrust lawsuit after another. Sure, they could crush Sony at this point but a lot of courts would probably see that as anti competitive.

At the $679 price point, you're $179 over the cost of the PS3 20gb. Add to that is you can use pretty much any SATA hard drive you want in the PS3 instead of having to pay for proprietary parts. Also, I didn't even get into the wireless issue, which will cost you anywhere from another $50-$100. So that $679 becomes $729-$779.

At the same time Halo 3 comes out, the PS3 is coming out with their exclusive Heavenly Sword, which is being looked at as one of THE games to get for the PS3. The launch of that game is going to be huge. Couple that with GTA IV coming out for both systems in October, and the wide selection of titles that are going to be released until then, and you lose a huge advantage you have over the PS3. Sony is not just sitting around, and you can bet they're trying to implement features such as IPTV, especially since they consider the PS3 not just a gaming console, but a media center. You also have the exclusives that Sony is picking up, like the 3 titles they're developing with Namco. And for a lot of us, Square-Enix is a huge, huge reason why we'll get PS3s regardless of the price points of the other consoles. They typically put out exceptional games, so with their exclusives for the PS3 and possibly Wii (I believe they have games in development for the system) you're looking at another obstacle the 360 is going to have to overcome.

Also, the 360 is basically a dead console in Japan. Sony is still selling a good amount of of PS3s there and this will only help them stay alive. So the 360 sales in the rest of the world have to make up for that market.

And as far as company research, don't give them too much credit. I'm sure Sony did plenty of research considering making BR optional, but they still didn't do it. While it's helping them win the format war, it's killing system sales overall.

As for the anti-trust concerns, it's absolutely garbage. Nintendo is crushing both consoles in terms of pure numbers since released, and while I personally find the Wii-mote a novelty at best, it should continue to remain strong as the game library increases. Sure Microsoft has deep pockets, but you can only bleed so much from a sector before it becomes a better financial alternative to pull out all together. Dominance in one generation does not result in dominance throughout the entire span of video-gaming. MS would have to do the same thing each generation, and that would be suicide.
 

Eeezee

Diamond Member
Jul 23, 2005
9,922
0
0
Consumers who already own the $399.99 20-gigabyte model will be able to buy a snap-on 120-gigabyte hard drive for $179.99.

Does anyone else think that this is a ridiculous price for the size hard drive? I don't think I've ever seen a retail store charge more than $100 for a 120 gig hard drive. What's to prevent owners of the Xbox 360 from just buying a hard drive and replacing the old one? I don't own a 360, so I don't know if anyone has done this.
 

BigJ

Lifer
Nov 18, 2001
21,330
1
81
Originally posted by: Eeezee
Consumers who already own the $399.99 20-gigabyte model will be able to buy a snap-on 120-gigabyte hard drive for $179.99.

Does anyone else think that this is a ridiculous price for the size hard drive? I don't think I've ever seen a retail store charge more than $100 for a 120 gig hard drive. What's to prevent owners of the Xbox 360 from just buying a hard drive and replacing the old one? I don't own a 360, so I don't know if anyone has done this.

One word: Proprietary.

Also, the hard drives are 2.5", which typically cost $80-$100 at the consumer level.
 

Eeezee

Diamond Member
Jul 23, 2005
9,922
0
0
Originally posted by: Agentbolt
They're already eating into Sony's market share

Not when you take the PS2 into account. Look at the numbers. People are still buying a virtually dead console because it's cheap. That's how important price is to consumers right now. Making the 360 cheaper = more sales.

And because the games being released for it are still killer. The PS2 was supposed to have its last golden egg months ago. Yet God of War 2 just came out, along with some other incredible looking games that are selling great.

When the 360 hit, Xbox sales plummeted. The PS2 was such a strong console that it has survived the launch of the PS3 (a relatively weak console, not enough good games yet for that price).
 

purbeast0

No Lifer
Sep 13, 2001
53,007
5,892
126
Originally posted by: Eeezee
Originally posted by: Agentbolt
They're already eating into Sony's market share

Not when you take the PS2 into account. Look at the numbers. People are still buying a virtually dead console because it's cheap. That's how important price is to consumers right now. Making the 360 cheaper = more sales.

And because the games being released for it are still killer. The PS2 was supposed to have its last golden egg months ago. Yet God of War 2 just came out, along with some other incredible looking games that are selling great.

When the 360 hit, Xbox sales plummeted. The PS2 was such a strong console that it has survived the launch of the PS3 (a relatively weak console, not enough good games yet for that price).

Yah but when the 360 launched, first party support for the Xbox immediately stopped. That wasn't said for PS2.

God of War 2 was known to come out after the PS3 launch for PS3, and is the basically the final hit that will sell for PS2.
 

ElFenix

Elite Member
Super Moderator
Mar 20, 2000
102,357
8,446
126
Originally posted by: Agentbolt
I did read your edit. I don't have any data to back up my argument, which would be that 1.5 years into the console's life cycle, when other newer consoles are on the market as well and any one of them could easily end up being the #1 console, is not the best time to be focusing on making a profit on the console AND the software/peripherals. Just like you have no data to indicate WHEN in a console's life cycle they generally start making a profit. Without hard data to back it up, any argument we'd have on that subject is pointless.
according to what i could find, the PSX made a profit on every console sold in the US, and the N64 did so as well (due to favorable exchange rates and precipitous drops in the price of memory). sony also discussed in it's annual reports to shareholders that the PS2 was always profitable on every console. profit, of course, being that the variable costs are covered and so some of the fixed costs of development may be paid. which isn't profit in an economic sense, but can be in an accounting sense.
Micosoft's goal is to sell 360's. Who on earth is talking about the PS2 threatening the home computer? That is a complete straw-man argument.
it's why MS is in the console business in the first place. sony wanted to position PS2 as the hub of your electronic life, overtaking the PC. now, that probably wouldn't have come to pass even without the xbox, but sony way making those claims back in the day (possibly only to circumvent EU tariffs on video game consoles, which were much higher than on computers). regardless of how credible the threat was, MS took it seriously. one thing to realize with MS is that virtually everything it does is partially motivated by it's desire to protect its windows (and office) market position.
Microsoft is not going to sell as many 360's as they would if people weren't buying the PS2 in droves because it is so cheap compared to the next-gen consoles.
probably not, but, then again, the people buying PS2s in drove are either a) buying into the large game library that the 360 doesn't have, or b) replacing their broken PS2. so, i'm not certain MS would get any of those buyers even with a price drop. the clearest buyers they could take are PS3 buyers, but even that isn't sure as many of those are probably early-adopters who already have the 360 or sony fanboys who won't buy 360 anyway.
Your argument that "sales are not slowing down" misses the point as well. Microsoft has not met any of it's stated goals of sold consoles in the past year. Sales aren't slowing because they really just haven't been that good to begin with.
well, it isn't ahead of PS2, but it is well ahead of where PSX was this far into it and roughly tied with N64. it's also head of where DS was. and while it looks about even with PS3 thus far, PS3 doesn't have the supply issues that plagued the 360.



 

ponyo

Lifer
Feb 14, 2002
19,688
2,810
126
Elite will be the downfall of the Xbox360. Microsoft just secured the third place finish in this generation console race.

Good job Peter Moore. I guess you didn't learn your lesson at Sega about releasing multiple add-on for a system and confusing the consumers and the developers.

Sony will be the biggest winner from this.
 

Queasy

Moderator<br>Console Gaming
Aug 24, 2001
31,796
2
0
Originally posted by: Naustica
Elite will be the downfall of the Xbox360. Microsoft just secured the third place finish in this generation console race.

Good job Peter Moore. I guess you didn't learn your lesson at Sega about releasing multiple add-on for a system and confusing the consumers and the developers.

Sony will be the biggest winner from this.

Yeah...I think it is a little too early to call this. The ultimate determining factor (at least between the PS3 and 360) is going to be the game libraries.
 

RaynorWolfcastle

Diamond Member
Feb 8, 2001
8,968
16
81
Originally posted by: Queasy
Originally posted by: Naustica
Elite will be the downfall of the Xbox360. Microsoft just secured the third place finish in this generation console race.

Good job Peter Moore. I guess you didn't learn your lesson at Sega about releasing multiple add-on for a system and confusing the consumers and the developers.

Sony will be the biggest winner from this.

Yeah...I think it is a little too early to call this. The ultimate determining factor (at least between the PS3 and 360) is going to be the game libraries.

This was such a bad move from so many perspectives:
1) This move legitimizes Sony's ludicrous pricing scheme

2) Regardless of what MS leads you to believe a $180 120GB drive is a ripoff of epic proportions

3) The Premium now exists in a no-man's land. Who's going to want the 20 GB drive now? You either want the 120 GB with HDMI or you want the core.

4) The Elite has now reached the same range as the 20 GB PS3. And I can't say that MS is better value at this price point. Granted, I'm not much of a gamer, but I don't see MS winning this battle.

5) Their 65nm chips are probably just a month or two away, bringing them significant cost reductions. Why not wait until the 65 nm tech is ready and pass the savings on with a price cut. It's pretty well agreed upon that at this point MS is turning a (small) profit on hardware; but getting greedy at this point in the game is just a bad idea.

 

Queasy

Moderator<br>Console Gaming
Aug 24, 2001
31,796
2
0
Originally posted by: RaynorWolfcastle
Originally posted by: Queasy
Originally posted by: Naustica
Elite will be the downfall of the Xbox360. Microsoft just secured the third place finish in this generation console race.

Good job Peter Moore. I guess you didn't learn your lesson at Sega about releasing multiple add-on for a system and confusing the consumers and the developers.

Sony will be the biggest winner from this.

Yeah...I think it is a little too early to call this. The ultimate determining factor (at least between the PS3 and 360) is going to be the game libraries.

This was such a bad move from so many perspectives:
1) This move legitimizes Sony's ludicrous pricing scheme

2) Regardless of what MS leads you to believe a $180 120GB drive is a ripoff of epic proportions

3) The Premium now exists in a no-man's land. Who's going to want the 20 GB drive now? You either want the 120 GB with HDMI or you want the core.

4) The Elite has now reached the same range as the 20 GB PS3. And I can't say that MS is better value at this price point. Granted, I'm not much of a gamer, but I don't see MS winning this battle.

5) Their 65nm chips are probably just a month or two away, bringing them significant cost reductions. Why not wait until the 65 nm tech is ready and pass the savings on with a price cut. It's pretty well agreed upon that at this point MS is turning a (small) profit on hardware; but getting greedy at this point in the game is just a bad idea.

I didn't say it wasn't a bad move...in fact, I've stated multiple times that the price is too high. I said it was too early to call this and that the ultimate determining factors (at least between the 360 and the PS3) is going to be the game libraries.
 

Hyperlite

Diamond Member
May 25, 2004
5,664
2
76
As they transition to 65nm, the premium needs to become the new core, and the elite needs to fall to $399. This means all systems will have a hdd, and perhaps game developers can start to factor that in. I realize this isn't ideal, but as far as i see it, its about the only logical course of action if they want to keep their reputation.
 

RaynorWolfcastle

Diamond Member
Feb 8, 2001
8,968
16
81
Originally posted by: Queasy
I didn't say it wasn't a bad move...in fact, I've stated multiple times that the price is too high. I said it was too early to call this and that the ultimate determining factors (at least between the 360 and the PS3) is going to be the game libraries.

Sorry, my post shouldn't have quoted yours; I was originally going to respond to it, but then changed my comment to what you have here and forgot to remove the quote block :).

 

Dumac

Diamond Member
Dec 31, 2005
9,391
1
0
I think many agree that this is generally a bad move by Microsoft, but the PS3 is going to need a lot more than this to pull their way out of their reputational slump.

I wonder when the pendulum will swing back round and everyone will start hating M$ again?
 

Queasy

Moderator<br>Console Gaming
Aug 24, 2001
31,796
2
0
Originally posted by: RaynorWolfcastle
Originally posted by: Queasy
I didn't say it wasn't a bad move...in fact, I've stated multiple times that the price is too high. I said it was too early to call this and that the ultimate determining factors (at least between the 360 and the PS3) is going to be the game libraries.

Sorry, my post shouldn't have quoted yours; I was originally going to respond to it, but then changed my comment to what you have here and forgot to remove the quote block :).

Ahhh ok. No prob. :D