Price Cut: 360 to 360
July 10th, 2007While we’re on the subject of the PS3 price cut, how should Microsoft respond? eat.sleep.game has a few thoughts on what they’d like to see from the 360, based on a tiered price drop that would allow the 360 to compete with the Wii as well as the PS3.
I can see the appeal, but I think they’re pricing more in line with what they’d like to pay than with what Microsoft’s likely to do. If I were Microsoft, I think I would go another route.
I don’t think Microsoft wants to compete with the Wii at all. Its target market is very different, the games and controls are divergent, and philosophically, it’s not looking to make gaming more accessible to the masses. Rather, it and the PS3 are targeting the same basic people, and it wants to do so profitably.
A price drop to the numbers Chufmoney suggests would make the 360 more price-competitive with the Wii, but I don’t think they’d attract enough additional buyers to make it worth the lost in margin (disclaimer: I don’t know anything about the relative economics of producing the 360, outside of what’s in the public domain, so take this with a grain of salt). Rather, if I were them, I’d focus on stretching down just enough that they still look like a far better deal relative to the PS3. That way, they could peel away additional potential PS3 buyers, while adding some more price-sensitive gamers who haven’t yet picked a horse in the next-gen battle.
My proposed price plan:
- Drop the cost of the Premium system by 10% or so (to a nice, round $360 or $370). It’s even visually appealing.
- Drop the cost of the Elite 360 by $50, from $479 to $429. It’s a nice, token amount that shouldn’t impact profitability too terribly and will look appealing to both current and potential 360 owners. Also, a lot of people may compare the cost of the Elite to the Premium, figure it’s a better value, and opt for the more expensive model instead.
- Don’t change the cost of the “Core” system, and consider phasing it out entirely. I don’t see why anyone would choose it anyways - and the discounted models will seem relatively more appealing.
I’d suggest that this would maximize the 360’s appeal relative to the new $500 PS3. Thoughts?
Posted in Business, Geoff, Microsoft, PS3, Sony, Xbox 360 |
July 10th, 2007 at 9:01 pm
Well, my only complaint about this is that I think MS actually IS interested in attracting more casual gamers that may be more in the Wii crowd at the moment. That was the point of XBLA and they’ve even made such comments as recently as a few weeks ago.
Supposedly we’ll “hear more at E3″, perhaps right now, as the MS conference is starting any minute now.
Is it just the standard “We like all gamers” line? Maybe, but at least they seem to be acknowledging it.
July 10th, 2007 at 11:05 pm
Yeah, MS is paying little more than lipservice to the casual market. They introduced an exclusive version of Scene it!? Woo hoo. Even Arcade doesn’t target the casual seeing as it requires the $400 premium as well as additional fees for games most casuals already play for free like UNO and Backgammon. No, Arcade is great to get the other non-gamer members of the household to game on the 360 where they might not have before, but I doubt the presence of Arcade will get many new prospective buyers to hop on board, not at $400. You can get a perfectly good version of Scene It for $19.99 at any walmart in the country.
That being said, the 360 is shaping up to be the console of choice for the core gamer, which MS should be doting on completely rather than playing pretend with the casual audience.
July 11th, 2007 at 10:21 am
I’m with used cisco… is a pure casual gamer really going to buy a $400 - or $300 - console just to get access to Scene It?
I hope not.