PDA

View Full Version : The Price War Cometh....



Reclaimer
10-17-2002, 04:54 AM
Microsoft/Sony: kicking off Price War II

Rob Fahey 12:00 10/09/2002
With price reductions for both the PS2 and Xbox taking effect at the start of this month, Datamonitor's Commentwire looks at the possible effect of the new price war on the console market in the run up to Christmas.


Sony and Microsoft have both slashed games console prices in Europe. Sony Europe's latest PlayStation 2 price cut has re-ignited the price war with Microsoft's Xbox. Nintendo won't follow suit in the short term - a wise decision, as it has less room to maneuver on price (and much shallower pockets) than its rivals. The latest move could well mean another round of price cuts for the Christmas period, stepping the pressure up still further. On August 28, Sony announced that it would lower the price of its PlayStation 2 games console to E249-259/GBP169.99 across Europe. Within hours, Microsoft countered by cutting the price of its Xbox to E249/GBP159.99.

Sony is in a comfortable position in this new price war, as the PS2 has a healthy installed base. While competitors still have to worry about reaching a critical mass to secure content and users, Sony's profits from games already offset the cost of hardware and R&D. It can now engage in a battle of wills with Microsoft and Nintendo to maintain its consoles leadership.

But Microsoft seems equally willing to dig into its deep pockets, rather than give an inch to Sony. Although this price cut will further deepen Microsoft's console losses, it cannot afford to be outpriced by Sony just a few months before the crucial Christmas period.

The buzz at this week's ECTS European games trade show is all about the impact of these price cuts - and about Nintendo's reaction. The manufacturer has stated that it has no imminent plans to lower the GameCube's price, which seems to be a sensible strategy considering the price advantage that the console has.

Even now, the GameCube is the cheapest console on the market, and if Nintendo lowered the price further it would probably have to reach the next psychological price point of E150/GBP99. This would leave Nintendo with little room for another price cut for a console that's only a few months old in Europe.

It's also worth noting that Sony's price cut has come early: manufacturers normally cut prices around Christmas, to boost demand during this crucial period - so there's a reasonable chance of yet another price cut later on this year. Can Sony afford this? Would Microsoft follow suit again? Would Nintendo be dragged into the price war? The answer to all of these questions is most likely to be yes.

Game Industry (http://www.gamesindustry.biz/content_page.php?section_name=research&aid=680)

Hugh_Jass
10-17-2002, 08:21 AM
Let the whining and demands for refunds commence.

ChiZel_MunKee
10-17-2002, 09:55 AM
lol, good one.

Highlite23
10-17-2002, 09:55 AM
Couldn't agree more Hugh.:rolleyes:

Evil_Dr_Beefy
10-17-2002, 02:56 PM
with all of the pricecuts...is anybody making a profit? Microsoft is banking alot on the xmas season...risky move? or great plan? We will just have to wait and see....

AmpedRider
10-17-2002, 04:04 PM
m$ could get burned baaaaad

No Fear 23
10-17-2002, 05:43 PM
doubt it

EHWfedPres
10-17-2002, 08:12 PM
I really dont see a purpose of posting this here considering 99% of people that come here already have an Xbox...but anyway..., id rather pay twice as much for the xbox and get it when it first came out like I did rather than have to wait nearly a year just for a price cut.

Bigwig
10-18-2002, 11:50 AM
I have not had a console since I had my dreamcast stolen and I but I would buy an Xbox this christmas if it was still at 200. I like the games for the Xbox better and the online play.

smack119
10-18-2002, 12:00 PM
hey jusy a question here, i dont feel like looking it up. who has deeper pockets, Sony or MS???

odpr
10-18-2002, 01:53 PM
ms, what ms doing in one day sony doing in a year!

DIGITAL
10-18-2002, 03:45 PM
Originally posted by smack119
hey jusy a question here, i dont feel like looking it up. who has deeper pockets, Sony or MS??? microsoft makes in a month what sony makes in a whole year!

smack119
10-18-2002, 04:00 PM
thats what i thought.... so i dont see how price is a problem....i say give xboxs away

laughs
10-18-2002, 05:06 PM
I think M$ will and is taking this personal and will shortly start their journey into videogame history as the best selling system ever. I can see it now....free xbox with every happy meal purchased..... I really think this is more of an hobby for Bill Gates to overcome another giant(SONY). I think he could care less if he lost a few Billion at first.....Good things will come

odpr
10-18-2002, 05:34 PM
micorsft just announce that it's earning even more this year, this year was the worst year of the techonlogy industry ever! , if microsft is showing proftes means that they are not in trouble, they are not going to cancel the box project , just because it will show the world that microsft is beatable, and they don't want to show this, more then that it doesn't cost them theh much, one extansion to office or something and they are covring again..

anyway I think they should be really happy wit h what they got so far, still there is more to go, and god damn it make games!!!

Reclaimer
10-19-2002, 04:31 AM
Originally posted by EHWfedPres
I really dont see a purpose of posting this here considering 99% of people that come here already have an Xbox...but anyway..., id rather pay twice as much for the xbox and get it when it first came out like I did rather than have to wait nearly a year just for a price cut.

It was just a look into the future. I thought it would be neat to see how things where coming down the pipe. And especially since this is European information, I thought it would be good to see how the rest of the world is doing. Son, I'm trying to give you a little culture:)