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.
