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PS2 Price May Fall, Gamecube Staying Put
mrquackers writes: "Looks like the price war in the console gaming world is starting a bit early. With Microsoft expected to announce a drop in the price of the Xbox to $199 next Monday at E3, Sony's rumored to be cutting PlayStation 2 prices as early as tomorrow. Meanwhile, Nintendo says it won't be making ANY price cuts before or during the show -- though it's not ruling one out for later in the year." Update: 05/14 18:01 GMT by T : An anonymous reader points out this CNN story indicating that the PS2 cut is official.
http://www.gamers.com/news/1147215
:)
Even the PS One is getting a price cut to $50
Are that the ethernet and 56k modem adaptors will be sold for just $34.95 each. Nintendo were looking as thought they weren't going to bring these out previously so this is damn good news - finally PSO without loads of hacked-up charecters (hopefully...)
Blaming GW Bush for the Iraq war is like blaming Ronald McDonald for the poor quality of food.
It really doesn't matter about matching or costing less than a competitors console. If its reasonably priced, and it has figurehead games and a reasonable fan base, it will go well. Pros and Cons: P2 - Its older, but thats not necessarily a hard thing. Its got crap all RAM, and its hard to program for, but its still got more support than the X-Box. It has good titles, the FF series, and a good controller. X-Box - Its a great console, but no matter how much it costs, if its got no figurehead titles, it won't sell. And it doesn't. Halo is ok, but thats all that's even made me look twice. Im writing it off already, due to no games coming that interest me. Gamecube - Not out here (Australia) yet, so i cannot comment. Give me PC anyday.
Think nothing is impossible? Try slamming a revolving door.
And yet, Microsoft has had a phenomenal attach rate, much higher than the PS2 had even months after its launch. Let's do the math. Assume at $200, the XBox is losing $150 (the commonly quoted (but unconfirmed) numbers were losing $100 at $300, but six months after the launch, we can assume that production costs have started to go down so that this price drop won't be losing a full $200). If the XBox has an attach rate of 4 games at purchase (assume $50 each, Microsoft would make say $15 on 3rd party titles, $40 on 1st party, also assume 2 of these are Microsoft titles), plus three controllers at $50 a piece (say, $30 back to Microsoft) because halo's great fun with four players, another $30 for the DVD kit (say, $15 back to MS), and $20 ($10 to MS) for advanced connectors (S-Video or component video and digital audio). That's $15 * 2 + $40 * 2 + $30 * 3 + $15 + $10 = $225, or a $75 profit on the sale of the XBox and attached games and peripherals.
My numbers may be off, but the point here is to show that, even though the XBox console itself is sold at a loss, a profit can still be made. And a profit very likely is being made, because it's already been shown that the XBox is attaching very well (and the recent price drops in Europe et al have actually increased the attach rate of new XBoxes -- do a google search).
And just as a preemptive strike against those who would invoke the Gord on me, I'm linking there already. He's a PS2 fanboy, and a funny author, but his maths don't add up.
its 40 billion not 400 billion. 400 billion constitutes M$ net worth.
Just look at the cell phone market. They give away $50+ cellphones for free to people that sign up. Their business model is working. The console market has been doing this for ages, it's not something that MS decided to do to this market.
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"I'm not Conceited...I'm just a realist..."
Where does this crap about Microsoft losing hundreds of dollars per console come from? Retarded slashdotnomics? The XBox is definitely not several hundreds of dollars worth of parts, especially for a manufacturer buying hundreds of thousands of each component. Integrated components are scores cheaper than non-integrated components. A processor slow by current standards on a fully integrated motherboard with a hard drive easily produced and procured from several different sources lacking price gouging components like speakers, a monitor, or a KB/mouse combo all make for a pretty inexpensive machine to build. A bare bones PC costs about as much as an XBox and they use more exepensive components. Besides Microsoft isn't paying the beaucoup fees to ship units overseas, they have manufacturing plants on the three continents they sell XBoxes on.
Console makers have always taken a loss on the initial batches of the consoles as a matter of course, the games were the money makers. Half of the cost of a new game goes back into the pockets of whoever makes the console. It costs a bit of money to have that Sony Entertainment or Nintendo logo pop up when the game starts. The consoles merely existed to play the games on. When a console maker hit black they'd drop the price of the console to just above cost and soak up the profit from licensing. Sony has been making a profit off the PS2 for a while now because with the XBox aiming at the same demographics the price of the PS2 hasn't needed to drop. They've sold millions of PS2s and made many more millions off all the blockbuster games for it. Microsoft might be taking a small loss or just operating on a razor thin margin with the XBox but they're not losing hundreds of dollars per freaking console.
I'm a loner Dottie, a Rebel.
No matter how big you are you just cannot indefinately lose hundreds of dollars on consoles.
:/
:)
No, not really. I did help in some Nintendo's game development about 7-10 years ago here is the figure(roughly, may vary in other place):
Game development kit: US$200,000.00
License to develop a game(including NDA your company need to sign): US$13,000.00
After you developed the game and made the mother chip, you need to send the chip back to Nintendo for mass product. They will send the result chips back to you. (Yes, you don't own it, you buy back the chips from Nintendo) Cost to buy back the chips (minimal 5000 a bulk) is approx.: $20x5000 = US$100,000.00
Not to mention the cost to package, market and promote your production. You must pay a certain amount of money to Nintendo if you care to market it(loyality fee, and fee to use the trademark something). Cost = unknown, depend on the scale and market.
In the process they earned at least US$313,000 excluding marketing. If the sales is good they will get part of your revenue - don't forget, you don't own the product you made, they own it. You were just given the right to market and sell it.
My friends and I left the field because it's too hard for same game development company to survive. I believe things has changed now, but the business model is more or less the same(anyone would update me?).
So, don't think they'd ever lose money selling console cheap.
That wasn't the link, this is the one I was meant to post.
it's in my head
Your's neihter:
You assume everybody buys 3 controllers (!). Maybe one is appropriate. Royalties on games on the XBox is 8 - 9$ AFAIK, which is more than on any other console but still a lot less than 15$ you quoted. Also they are giving away games to people who bought at the expensive price, so your 4 games per console is also very optimistic.
most large box retailers of 7 days price match. i know that Best Buy, Circuit City, and Fry's all do. take it back and get the money refunded that you over paid.
;-)
/* Half alive and half dead too, work is for suckers and the sucker is you. - "Half-life" by Local H*/
PS2 $199
XBox $199
PS1 $49
Also Micro$oft has dropped the price on many of the accessories... finally. Still, the only reason to buy an XBox though is for Halo. So, if you've beat Halo and are bored with it, the XBox is worthless.
-jz