Researchers' opinion on Microsoft's launching strategy

[Domination]

The research firm, which rates Microsoft at "outperform," expects Xbox 2 to be available for retail sale in October or November at a retail price of about $249 to $299. Goldman said the Xbox console would cater to the lower-end of the consumer segment. The firm expects Microsoft to ship about 3 million units of the Xbox 2 worldwide in the December quarter. Sony is expected to debut the PS3 at E3, "although the product is not expected to be available in the U.S. until mid-2006 (perhaps a Japan launch in the fourth quarter of 2005 although more likely in the first quarter of 2006)," Goldman said.

Source

I don't know about you all, but this was nothing I didn't already expect. Something similiar was mentioned by one of the guys behind the Xbox awhile back. Having a cheaper console will allow Microsoft to slash the price a lot easier, and I think this is what they'll be using to their advantage next-gen. But, as usual, I still don't see the others putting up with it.

[xbdestroya]

$249 would definitely be a strong launch price for the XBox 2 - I wonder what kind of losses they would be taking on it initially at that price.

[Grandia]

The research firm, which rates Microsoft at "outperform," expects Xbox 2 to be available for retail sale in October or November at a retail price of about $249 to $299. Goldman said the Xbox console would cater to the lower-end of the consumer segment. The firm expects Microsoft to ship about 3 million units of the Xbox 2 worldwide in the December quarter. Sony is expected to debut the PS3 at E3, "although the product is not expected to be available in the U.S. until mid-2006 (perhaps a Japan launch in the fourth quarter of 2005 although more likely in the first quarter of 2006)," Goldman said.

Source

I don't know about you all, but this was nothing I didn't already expect. Something similiar was mentioned by one of the guys behind the Xbox awhile back. Having a cheaper console will allow Microsoft to slash the price a lot easier, and I think this is what they'll be using to their advantage next-gen. But, as usual, I still don't see the others putting up with it.

4th Quarter PS3 launch in Japan.....Now that would be quite surprising. Unlikely though. FFXII and KH2 aren't even out yet....Unless Sony is having SquareEnix convert them to the PS3.... :shock: That would be quite a good way to counter Microsoft. While we're thinking about it, we haven't heard anything about the two titles in a while... :wink:

That would be great.

$249 for the Xbox2. Now I'm confused here. Microsoft is a software company. They don't have the advantage of developing a lot of the components in the X2 internally. So, assuming that the X2 will be on par with the PS3, how won't they bleed from this? Wouldn't they be losing a massive amount? Even moreso than with the Xbox?

[xbdestroya]

$249 for the Xbox2. Now I'm confused here. Microsoft is a software company. They don't have the advantage of developing a lot of the components in the X2 internally. So, assuming that the X2 will be on par with the PS3, how won't they bleed from this? Wouldn't they be losing a massive amount? Even moreso than with the Xbox?

Oh definitely, no doubt there. I think they would simply be trying to snag up as much next-gen marketshare as they can before PS3 launches so they can more or less establish a sizeable beach-head. I wonder if there's something they know about as it applies to PS3 that they are scared of - the recent action on their part seems almost too extreme. I guess either way, they're just giving it their all.

[Rallyracr420]

It'll be $300 until the PS3 comes out and then MS will instantly drop it down to $250. MS won't be losing as much money as you think...maybe $100 on each console. They'll make this back quickly by selling larger flash memory cards and the add-on hard drive.

[xbdestroya]

MS won't be losing as much money as you think...maybe $100 on each console.

Where'd you get that information though? I'm not saying I agree or disagree, it just seems a bunch of people all over the place are making claims as to how much Microsoft will or will not be losing with XBox 2 sales, but I haven't seen anything hard or from Microsoft indicating anything of the sort.

[Domination]

$249 would definitely be a strong launch price for the XBox 2 - I wonder what kind of losses they would be taking on it initially at that price.

In my honest opinion, I believe the losses will be minimum. Hense the reason for them not including the HDD, going with neither next-gen DVD format, and the box to likely not support backwards compatibility (driving up cost on alien technology). They're using Nintendo's strategy and Sonys' at the same time. I saw this coming when they annouced how the HDD would cause them to lose money on their console if it came implemented.

With the PlayStation, Sony can penetrate the market faster in their other divisions. It basically keeps the others from breathing down their neck. Knowing that, Sony has two options:

a) brige the gaps and deliver more

or

b) continue the pass strategy and let Microsaoft gain enough support to where they could throw as much money into the next console as they want without worrying about cost and continue running with the ball while profitting at the same time - kinda like windows, basically.

Frankly, I don't see 'B' happening at all, judging by what I have begun to see from Sony.

[diOndOrAntt]

Weird, i thought the videocard already costed $ 500 each

[Rallyracr420]

MS won't be losing as much money as you think...maybe $100 on each console.

Where'd you get that information though? I'm not saying I agree or disagree, it just seems a bunch of people all over the place are making claims as to how much Microsoft will or will not be losing with XBox 2 sales, but I haven't seen anything hard or from Microsoft indicating anything of the sort.

I'm basing it off the old XBox. The original XBox cost about $430 to manufacture and they sold it for $300. Now with the internal HD gone, that's $30 off the cost of the system.

As for the rest of the system:
Ram will cost about the same since it has fallen in price but they're including more MB. DVD drives will be much cheaper. Materials will be physically less because the box will be smaller. Both the original XBox GPU and the new XBox360 GPU were top of the line when they debuted, so I expect GPU price to stay the same. The CPU will be more expensive. Also the networking hardware will be more expensive because its including wireless.

[axia777]

I can see that many XB:360's being sold that fast before Christmas. It is obvious that it will sell that many. How many XB's are sold now? Around 15 million? It will sell at least that many.

I do still know alot of people that are mighty pissed off about the rumored lack of backwards compatability and the lack of a HD. Some of my buddies at school and such that own an XB say they may not by an XB:360 because of it. My buddy Dave says that if he can't play old games on the new console he will just keep his old XB and screw then new one for now. Some also bitch that XB:360 is coming out too soon and that XB still has alot of life in it yet. If even 10% of XB owners feel this way, things could be mildly bad for Microsoft.

All in all I believe that Microsoft will definatly gain some ground on Sony, but if anyone really expects XB:306 to beat PS3 they are insane. Sony are at the top of their game. They wont take any of this lying down. Heck, this will only make Sony try harder. If XB:360 gets good sales, which it will, Sony will pull out all the big guns and let lose. Competition is good, no? :wink: Good for us that is.

BTW, X-Box:306 is the LAMEST name in the history of consoles.

[imported_The_One]

Weird, i thought the videocard already costed $ 500 each

That's the retail price. Take for example, P4 Extreme Edition. When it was released, it costed $1500CDN+, yet it only costs about ~$54 to fabricate one chip.

The actual manufacturing price for the GPU's will be much lower, so they won't cost $500 each.

[mckmas8808]

I think Sony instead of attacking with words about what the PS3 can do, they may attack with their current system.

Think about it if Sony drops the price of the PS2 between $99 and $119 and drop all it's first party game's price between $29 a $39 that could slow the Xbox360 sales.

Which would you want to buy a $300 system with 13 first gen games or a $99 system with $29 first party games?

[Rallyracr420]

I think Sony instead of attacking with words about what the PS3 can do, they may attack with their current system.

Think about it if Sony drops the price of the PS2 between $99 and $119 and drop all it's first party game's price between $29 a $39 that could slow the Xbox360 sales.

Which would you want to buy a $300 system with 13 first gen games or a $99 system with $29 first party games?

I hadn't thought about that. That's a good strategy and one I bet we'll definitely see pop up. It makes perfect sense considering XBoxes are already ceasing manufacturing, so the PSTwo wouldn't have any competition!

[Fats]

Perhaps it would have made sence for Sony to release the PStwo around the time that the X-box 360 is released. I'm sure sales would have been decent enough if the original PS2 was still in production up until the 360 release date.

[axia777]

I think Sony instead of attacking with words about what the PS3 can do, they may attack with their current system.

Think about it if Sony drops the price of the PS2 between $99 and $119 and drop all it's first party game's price between $29 a $39 that could slow the Xbox360 sales.

Which would you want to buy a $300 system with 13 first gen games or a $99 system with $29 first party games?

Brilliant idea. That just might slow Microsoft in their futile quest for dominance. If I were Sony I would also drop the price of PSP to $149.99 at the same time as the PSTwo price drop on the same day as the XB(Lame Name)360 launches. That would screw them.

[bRoNx]

Perhaps it would have made sence for Sony to release the PStwo around the time that the X-box 360 is released. I'm sure sales would have been decent enough if the original PS2 was still in production up until the 360 release date.

I don't know about that. I think the timing of the PSTwo was ok. I don't think they could've afford to wait that long to release it.

But regarding direct competition with the X360, perhaps they'll release a bunch of AAA titles for the PSP (GTA comes to mind), or even a price drop on the PSP hardware itself. This, along with good strong marketing (like only SONY can), I'm sure people will certainly think twice about that X360 purchase. PS2/Two is just too old, but the PSP has been branded the 'next iPod', so time to cash in 8)

[Domination]

Perhaps it would have made sence for Sony to release the PStwo around the time that the X-box 360 is released. I'm sure sales would have been decent enough if the original PS2 was still in production up until the 360 release date.

I'm sure Sony was already in the middle of the project before Microsoft annouced their emergence in the gaming industry. So it was probably too late for Sony to change directions even if they wanted. I would also assume that the Dreamcast would have probably stolen enough of the market to hold on a few years longer if Sony didn't attack them attack them on all four like they set themselves out to do.

[Domination]

Perhaps it would have made sence for Sony to release the PStwo around the time that the X-box 360 is released. I'm sure sales would have been decent enough if the original PS2 was still in production up until the 360 release date.

I don't know about that. I think the timing of the PSTwo was ok. I don't think they could've afford to wait that long to release it.

But regarding direct competition with the X360, perhaps they'll release a bunch of AAA titles for the PSP (GTA comes to mind), or even a price drop on the PSP hardware itself. This, along with good strong marketing (like only SONY can), I'm sure people will certainly think twice about that X360 purchase. PS2/Two is just too old, but the PSP has been branded the 'next iPod', so time to cash in 8)

I don't know about that. Sony, as we speak, is working on a HUGE line-up of triple-A titles for the PStwo. The PSP, I'm not sure of at this time. But I know those titles will be ready before Christmas. If I were to guess, I would say Sony is rounding up these titles for the sole purpose of combating the Xbox 360 later this year. So that strategy couldn't be far off from being true.

[mckmas8808]

Yeah can you imagne the big three (Ratchet & Clank, Jak & Daxter, and Sly Cooper) being released from Sony this fall at a $29.99 price point and the release of GTA Mobile, Gran Turismo 4 Mobile, The Godfather for PSP, and Madden 2006. All this on a PSP that will probably be sold for a sub 200 hundred dollar ($199.99) price.

Average people will see this as a price drop, but true gamers will know that they just stripped the value pack. Can't wait, E3 should let in some insight.