PlayStation 2 Sales Double Following Price Cut

Thanks to GamesIndustry.biz for its article discussing significant PlayStation 2 sales increases following the price cut to $149 last month. The piece quantifies: "Data released this week by Sony Computer Entertainment America shows that the console's sales rose by some 216 per cent in the week immediately following the price cut, with an increase of 141 per cent over the full period since the cut", and this means: "The increase in sales will have propelled the PlayStation 2 well past its console rivals, after Sony's platform slipped behind the Xbox in monthly sales for the first time since the launch of the Microsoft console." It's also explained: "The increased sales noted since the price cut have actually pushed year on year sales of the PS2 upwards, with 26 per cent growth on the same period last year - and should hopefully help to slow the overall decline in hardware sales which has hit the USA so far this year."

Comments

Price cut or E3?

[NanoGator]

Well I really can't speak for anybody besides myself, but the main reason I'm interested in maybe getting a PS2 is GTA San Andreas. Price cut is icing.

Re:Price cut or E3?

[Recoil_42]

Just remember that sony still has that deal going on with Rockstar for a timed exclusivity... The Xbox and PC versions will come months later...

Re:Price cut or E3?

[karnal]

Thankfully, I've not had too much problem with Sony hardware.

I still have an original PS-1 (with the AV outs on the back.) Sure, a glass of water spilled on it, requiring me to find a vendor to sell me a power supply, but that was it. Still plays discs fine.

I also bought a PS2 when I knew that Soul Calibur 2 would be out for it. Now, it's relegated to playing DVDs to my el-cheapo home theatre (old business projector and blackout cloth screen.) Never missed a beat.

I've also got a Sony STR-DE935 receiver that has never ever skipped a beat. I once thought it was having trouble with the subwoofer output; turns out that's my fault for putting an RCA cable where people walk!

My only real issue is - I bought a minidisc player for about 200$ a few years back when I had hernia surgery. Pretty sweet unit, and sounds excellent with a good set of cans, however when you use said unit to record, anything in the last 15 minutes of the disc gets skippy. Plays all other recorded media fine (have a component recorder as well.)

Sony's solution to fixing my MD player? Give us 150$ and we'll give you one of comparable value. Well, crap, I'd rather just go out and spend $$ on a new MD unit. Which I would, if the cheaper ones had mic and line ins (I could rant about this for hours, can't you tell?)

So, for me, it's 1 of 4 broken in probably 6 years I've been aquiring Sony hardware. I'm just glad it was the MD player, and not the others... 'cause now I can justify that MP3 player I've been eyeing for 2 years!

Interesting.

[ajutla]

Is it just me, or is that a little bit...strange? They cost $180 before the price drop, and then they cost $150 afterwards. It's not that much of a difference, is it? Certainly not enough to merit twice as many people rushing out and buying one...what kind of consumer thinks, ooh, I'd always wanted a PS2 but, y'know, they were just thirty dollars too expensive for me? I guess this is the same mentality that wouldn't hesitate to buy something that costs $19.99 but would flinch at anything costing a flat $20, because it's too expensive.

I had a teacher once who was very adamant on that point. We don't need pennies, he would say. Pennies are a waste of metal. We need to take pennies out of circulation. Someone would invariably ask about things that cost $19.99. Well, we'd raise their price to $20, fool, he would say. This makes sense to me--and it made sense to him, but I imagine that a lot of people wouldn't be able to handle it. The economy would collapse. A very large segment of the population considers $19.99 to be a hell of a lot cheaper than $20. On the PS2 front, these same people are ecstatic about the gigantic price drop and buy twice as many of the things as they bought before.

This could be a very interesting pricing strategy for video game console manufacturers:
1. Debut the console at a price point of something like $300.
2. Every three to six months thereafter (the timeframe could easily be extended or shortened) drop the price by, say, $10.
3. Laugh as sales nearly double right after doing this.
4. Repeat until console has saturated market.

This reminds of the GameCube thing that happened a while ago. I believe it was last summer that Nintendo had a deal going with the Cube:

Buy a $150 GameCube, and you get a free $50 game.

Well, this was quite a deal, but sales were stagnant. Some months later, the marketing geniuses at the big N decided to adopt a new tactic:

Buy a $100 GameCube, and you don't get anything for free.

Lo and behold, sales shot up. Why? Well, obviously, because now it's fifty dollars cheaper!!! Never mind that you have to buy a game to play the stupid thing, it's just a better deal.

It's interesting to think about this stuff.
How stupid is the average shopper?

Re:Interesting.

[addaon]

(Probably late enough post that no one will read it, but what the hell.)

The *.99 cent pricing strategy was NOT started as a psychological trick. It was first instituted by Macy's, the big department store, to solve a very specific problem.

Scenario 1:

I go in and buy a $5 whoosit, and bring it to the cashier. She rings me up for $5, I hand her a $5 bill, she smiles, and I walk away.

And then she sticks the $5 bill in her pocket.

Scenario 2:

I go in and buy a $4.99 whoosit, and bring it to the casher. She rings me up for $4.99, I hand her a $5 bill, and she has to open the register to make change. Opening the register registers the sale, and she can no longer slip money into her pocket off the books.

So Macy's decided to make $0.01 less on each sale, in exchange for essentially eliminating (this form of) employee theft.

This problem could have been dealt with in other ways. Taxes now solve it; it's very rare that a price at a store like Macy's will fall on a dollar amount. Alternately, you can just convince the customer to always ask for a receipt... I just got back from China, and one of the things that is big over there (maybe required?) is for receipts to have small lottery scratch-offs on them, where you have some chance of winning a dollar or two. The idea is that this gives the customer motivation to ask for the receipt, which means there's always a record of the sale. Although the beneficiary in the government (the record is used to avoid tax fraud), the idea is the same.

Even though everyone thinks that *.99 pricing is a psychological trick, that was not its original purpose. Whether or not it is effective at this adopted purpose is, as far as I know, an open question.

Re:Interesting.

[bjb]

Actually, $2 bills never really went out of circulation or print, they're just not that popular.

Every dozen-or-so years, the mint prints up a bunch of $2 bills. The last run was in 1995, and before that, 1976. Before that, something like 1959. Banks and most shops just hate the things because they don't have special drawers for them (typical cash registers have 4 slots: $1, $5, $10 and $20+).

The hard part is finding them. I have one bank that I know of where I can find the things, and whenever I make my way there I'll "buy" 20 of them. Why? They're fun. You give them as a tip to a bartender and they're usually thrilled and give you great service the rest of the night. You use them when going through a toll booth where the attendant is used to combinations of "standard" bills, and you can totally catch them off guard and watch their brain stall. You can give them to friends who think its the greatest thing in the world and figure that they'll keep the bill in their wallet for good luck (until they're short on cash one day). So on and so forth.

One think I'm curious about

[Tikiman]

How many people are buying new ones just to replace old ones? I had a bum unit that was repaired - $80. When it happened again, it was more cost effective to trade in the old one for $100 credit toward getting a new one. Perhaps more people are doing this now

Re:Slump in hardware sales?

[fr0dicus]

As far as I can see, the latest graphics card costs twice as much as a new console...

I don't think I've ever purchased a new TV or couch because of my console, but if I did I'd have the benefit of something decent sized to watch films and TV on too, not really a major drawback, I'd certainly rather have a 42" TV than an 18" monitor for my PC.

In terms of games numbers, maybe I would have more games on the PC if that many good games ever came out for the damn thing; and there are plenty of console games with massive longevity that is there for a good reason, as opposed to having to go there in order to prop up the PC gaming industry in the monthly gaps between decent releases.

Consoles help programmers, as they're a much bigger market for them to sell to. The PC hardware market has been up its own arse for so long selling unnecessary incremental upgrades (I'm talking massive 66Mhz rises in CPU speeds, releasing 4 different graphics cards within 10% of each other, Hard drives with 5% more storage than the last model), that it deserves to be in a slump. Finally they're innovating now, I feared we'd be stuck with Megahurtz, PCI and AGP for far too long. Face it, anyone using a PC for mainstream tasks don't need the extra 2Ghz that Intel want to sell them, they're bringing it on themselves.