Xbox 360 price cut at the wrong time? Marketer says it is a negative move

[Zeus]

Recently Microsoft announced an official price cut across their Xbox 360 SKU's, while MS themselves claimed it was a positive action as they held on for so long without price cutting, a marketer has come forward to say that the price has a number of downsides. Firstly it implies the product is losing added value, it indicates to competitors that sales are not as good as expected, MS has to compensate for the retail stock and suggest a new product is coming soon. One could easily argue that all of these points are applicable to the Xbox 360, and that with Halo 3 and the introduction of the Elite, was the price cut kicked in at the WRONG time by MS?


Analysis: As a marketer, the last thing you tell your management to do is to cut price of your product. Despite the expected generated sales increase, it might generate more downsides that expected:

- Your product is losing added value
- You give the market a signal your sales might not be as good as expected
- You have to compensate for the retail stock
- It might announce a new product coming soon

In addition to those points, the timing of such a price cut is extremely critical. While some of us could agree a price cut for the back to school season is a good idea, some others will argue it was not needed because of the future Halo 3 release and the recent Elite version announcement.

Cutting the xBox prices drives more negative attention than expected. Sony PS3 is still more expensive and suffering from sales issues and Nintendo Wii still leads the market. This price cut will not have a significant impact to change it.


News Source: <A href="http://www.glgroup.com/News/Wrong-Timing--15645.html" target="_blank">glgroup.com</a>

[danight]

While if you look you can fin bad in anything.
But the obvious reasons
1) compete with the wii in price point
2) further increase the gap in ps3 and 360
3) best line up of games now with a cheaper price will be enticing for the holidays
4) halo3 will help sell consoles regardless of price

The wii has took over the number #1 spot and they need to lower the price to compete. Sony is in no shape to fight the wii. timing isnt much different then past gen systems. A year and a half is a pretty long at full retail.

[dannybII]

What a ridiculous pile of tosh?

Who would prefer to pay more on account of a PERCEIVED "added value" ? A price cut can only make a product look more attractive. The PS2 and Wii are selling by the boat load on account of a more attractive price. Consumers are more prone to buy an item if it's affordable, it's as simple as that.

If people preferred to pay more then the PS3 would be winning the console race.

[So-Unreal]

I other systems had a price cut long before the 360 did. I think they say all sysyems have a price cut with-in its 1st year or so.

[DEDDOA]

My favorite there was that it gives the view that somthing new is coming out which can be negative. I notice that is what didn't happen with the PS2 much to sonys dismay. Maybe if they drop the price again afew times people will think, oh no better buy a Ps3 because the PS2 has had a price drop making it even more attractive :rolleyes:

All the price drop says to me is
1. The core is now the same price as the Wii, making it a viable option (especially for kids/husbands/boyfriends trying to convince their parents/wives/girlfriends to let them have one)

2. The Elite doesn't look as much of a rip off with the lower price and by comparisson the premium looks even better.

3. With Wii becoming market leader, it would make sense to make the 360 look more attractive to generate more sales. It may not regain MS the lead but it should help reduce how far they fall behind.

[Black RL]

I don't believe I'm reading this in the center of maxconsoles....

Yah man, I prefer to pay MORE for everything....

What a pile of crap news.....

[cardboardbox]

many here try to spin the ps3 price cut and 5 free movies as a terrible thing so....

[Black RL]

Going down in price is allways good.

[danight]

many here try to spin the ps3 price cut and 5 free movies as a terrible thing so....

if 360 gives 5 free movies, $100.00 price cut, and free games and still doesn't increase sales. id say its not a very good thing for them either. Sony did all this in just 8 months after launch of the ps3. The ps2 doesn't even get 5 free movies in its bundles. The 360 has been out for a year and a half its about time for a price cut. The wii took the number 1 spot so its strategic for Microsoft to wanna battle the wii on the price. You don't see Nintendo cutting price in just 8 months.
If the ps3 was selling it wouldn't have to do all this stuff to try and spark interest. But holidays is coming up and price does matter. Microsoft need to fight an try and get #1 back while the wii just does its thing.

Sony is just tripping fighting a war on 3 fronts.
1) console war 2) format war 3) what generation to support war
format war and console war is suffering because of the same problem. Price. while the ps2 proves sony should not have tried to force blu-ray on the consumers.
1 thing is for certain sony is good but not that good they can win it all. if they lose the format war then the ps3 is doomed to have a high price with unsupported drive in it. If sony wins the format war and losses the console war then the ps3 will go down in history as a flop (what most people consider it to be now). If sony doesn't decide what system to back they will cont. to lose support of the ps3 users since ps3 users are jealous ps2 is getting more games and better games than the ps3.

Thats why people say its bad. If the system wasn't in trouble they wouldn't be offering it. Much like if Microsoft wasn't scared of the wii taking over the #1 spot they wouldn't offer a price drop either. If you have a good product that sells it self (wii) you don't need free movies or 100 dollar price cuts. The unit is priced consumer friendly and the demands is bigger than the supply.
But price wars are good for consumers as we get deals faster than we would if there was no competition.

[cardboardbox]

if 360 gives 5 free movies, $100.00 price cut, and free games and still doesn't increase sales. id say its not a very good thing for them either. Sony did all this in just 8 months after launch of the ps3. The ps2 doesn't even get 5 free movies in its bundles. The 360 has been out for a year and a half its about time for a price cut. The wii took the number 1 spot so its strategic for Microsoft to wanna battle the wii on the price. You don't see Nintendo cutting price in just 8 months.
If the ps3 was selling it wouldn't have to do all this stuff to try and spark interest. But holidays is coming up and price does matter. Microsoft need to fight an try and get #1 back while the wii just does its thing.

Sony is just tripping fighting a war on 3 fronts.
1) console war 2) format war 3) what generation to support war
format war and console war is suffering because of the same problem. Price. while the ps2 proves sony should not have tried to force blu-ray on the consumers.
1 thing is for certain sony is good but not that good they can win it all. if they lose the format war then the ps3 is doomed to have a high price with unsupported drive in it. If sony wins the format war and losses the console war then the ps3 will go down in history as a flop (what most people consider it to be now). If sony doesn't decide what system to back they will cont. to lose support of the ps3 users since ps3 users are jealous ps2 is getting more games and better games than the ps3.

Thats why people say its bad. If the system wasn't in trouble they wouldn't be offering it. Much like if Microsoft wasn't scared of the wii taking over the #1 spot they wouldn't offer a price drop either. If you have a good product that sells it self (wii) you don't need free movies or 100 dollar price cuts. The unit is priced consumer friendly and the demands is bigger than the supply.
But price wars are good for consumers as we get deals faster than we would if there was no competition.

so in summary: If Sony drops the price of the PS3 and offers free movies, its bad. If MS drops the price of the 360 and offers free games, its good.

Got it.

[pCeSlAyEr]

so in summary: If Sony drops the price of the PS3 and offers free movies, its bad. If MS drops the price of the 360 and offers free games, its good.

Got it.

haha... thats not what he meant and you know it.

[Mikeyy]

While if you look you can fin bad in anything.
But the obvious reasons
1) compete with the wii in price point
2) further increase the gap in ps3 and 360
3) best line up of games now with a cheaper price will be enticing for the holidays
4) halo3 will help sell consoles regardless of price

The wii has took over the number #1 spot and they need to lower the price to compete. Sony is in no shape to fight the wii. timing isnt much different then past gen systems. A year and a half is a pretty long at full retail.

What Gap? If you align the launches, Ps3 is doing just as well as the 360...

http://www.vgchartz.com/hwcomps.php?cons1=Wii&reg1=All&cons2=PS3&reg2=All&cons3=X360&reg3=All&align=1

[danight]

Im not talking about launch rates. Im saying the gap in people who actually buy games! You know what they call "market share". The gap as of right now in how many people own a wii vs a 360 vs a ps3.

You know the chart that says:
wii:41.6%
x-box 360:41.4%
ps3: 17%

Thats gap is what i was talking about. 2 neck and neck for first place with the 3rd being left in the dust.

[cardboardbox]

haha... thats not what he meant and you know it.I'm pretty sure thats what he meant...

[cardboardbox]

Im not talking about launch rates. Im saying the gap in people who actually buy games! You know what they call "market share". The gap as of right now in how many people own a wii vs a 360 vs a ps3.

You know the chart that says:
wii:41.6%
x-box 360:41.4%
ps3: 17%

Thats gap is what i was talking about. 2 neck and neck for first place with the 3rd being left in the dust.you fail to mention that one of those has been on the market for 21 months while the other two have been out for 9 months. Makes a difference dont you think?

[danight]

No i dont. I think here and now matters to game developers. They wanna know what systems has the most users that will help them sell the most copies. 3rd party support is crucial and thats 1 thing thats hurting the ps3. Wii selling good has everyone jumping on the "lets make a wii game" bandwagon.

Who ever is number 1 can basically demand 3rd party support. Much like sony did with the ps2. Time of how long a console has been out is irrelevant.
How long a console is out does not sell games. You think its normal that most major game developers dont plan to release ps3 games this year.

lets see if you where making a game what platform would you make it for?
the wii with 10 million owners?
the 360 with 10 million owners?
or the ps3 with 4 million?

if the ps3 sold like the wii did i would promise you everyone would be releasing games on the ps3 NOW!. The fact that gears of war sold as many copies as there is ps3 owners is why market shares are important.

I'm pretty sure thats what he meant...
NO thats not what i ment. If i ment that then why doesn't sony cut a hundred dollars of the ps2 and offer 5 free movies and a game with that?
The ps2 is selling good and doesnt need all the gimmicks to try and get people to buy it. The ps3 does and its bad when game developers start saying it.

[msanchez]

:( another thread going out of control.

Anywho, I have the same opinion about this as I do with the ps3: Does the consumer give a cr@p about anything other then the fact they're getting a better value?

I don't remember the last person that I know of who checked MS/Sony/Nintendo's stocks before buying their console. If price cut's mean desperation, then I hope all 3 console makers believe that the apocalypse will be upon us before x-mas; that should make then desperate enough.

Danight... have you heard the term double standard?

[cardboardbox]

No i dont. I think here and now matters to game developers.You posted: "Thats gap is what i was talking about. 2 neck and neck for first place with the 3rd being left in the dust." That was what my comment was in reference to. To be objective, one should say that one of those 3 is leaving the other two in the dust and the remaining two are on the same sales path.

NO thats not what i ment. If i ment that then why doesn't sony cut a hundred dollars of the ps2 and offer 5 free movies and a game with that?
The ps2 is selling good and doesnt need all the gimmicks to try and get people to buy it. The ps3 does and its bad when game developers start saying it.but the 360 price cut and free game is a good move. Good analysis.

[Xenogears V]

Seeing the success of the Ps3, I would say everything the contrary.