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Elite Won't Replace Premium or Core Skus
Posted by
Zonk
on Wed Mar 28, 2007 02:37 PM
from the get-thee-behind-me dept.
from the get-thee-behind-me dept.
As the day has progressed, more information about the 'Elite' has become available. GamesIndustry.biz is reporting that the other two 360 skus will still be available. The Elite is not replacing either of them. Interestingly, there's no word on a price drop for them either. Major Nelson's most recent podcast has several interviews and details about the new offering, which you may find informative. There's more analysis available, if you find that interesting: CVG wonders aloud who is going to buy this thing, while a Wedbush Morgan analyst mentioned to GamesIndustry.biz that he thinks this validates the PS3 strategy. "'It appears to me that Microsoft sees the writing on the wall - Blu-ray is going to win the format wars ... Ultimately, Microsoft will likely offer a Blu-ray drive with the 360 Elite, and I think consumers will be able to select based solely upon other drivers.' Pachter also believes that although the Xbox 360 Elite will register with early adopters of hi-def content, the current 20GB model will still be sufficient for many consumers."
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Sony Readying for Larger HDD PS3 ? 117 comments
Bloomberg reports that Sony may be considering a new SKU for the PS3 with a larger hard drive. This follows closely on the heels of the announcement of the Xbox 360 Elite and the 120 gig Xbox HD. No other details are provided, in a story primarily about news of increased profits as PS3 sales continue to rise. " Chief Executive Officer Howard Stringer targets an operating profit margin of 5 percent by March 2008, about double the current margin. Tokyo-based Sony confirmed today that it will only sell a more expensive version of its PlayStation 3 game console in North America, a strategy it adopted for the European market to bolster margins. 'Profit margin will probably exceed 5 percent if Sony doesn't lower the price of PlayStation 3,' Hitoshi Kuriyama, an analyst at Merrill Lynch & Co. wrote in a report dated yesterday. He rates the stock a buy. Shares of Sony gained 28 percent this year, compared with a 0.8 percent advance in the Nikkei 225 Stock Average."
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Xbox 360 Price Cut Dismissed 36 comments
Next Generation is reporting that, despite comments from director of Xbox product management David Hufford saying that a console's 'sweet spot' is $199, Microsoft has no plans to drop the price any time soon. His comments came from a Bloomberg article we discussed last week. "Some are getting really spun up about the Bloomberg story and inaccurately reading tea leaves that don't exist. I spoke to Bloomberg nearly two months ago and we were talking about NPD data that had just been released, and chatting generally about price points of consoles in the market. The comment, which is accurately reported, unfortunately has now been taken way out of context and being reported as if I am signaling a price drop ... With Xbox 360s selling well at their current price point, Elites selling out at $479, and an insanely great portfolio of games in the market, there's no reason to announce any kind of price drop anytime soon."
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If I don't care about HDMI... (Score:2, Insightful)
Re:If I don't care about HDMI... (Score:5, Funny)
The core doesn't have a headset, and comes with composite cables, not the composite/component of the premium & elite. That and... it's black. Once you go black, you never go back.
Parent
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If you believe in yourself, stay in drugs, drink your sku, and don't do milk, you'll go somewhere.
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The 120GB HDD is being sold separately for $180. Core + HDD = $300 + $180 = $480, the same price as the elite. Why would you not buy the elite if you wanted a new 360 with the 120GB HDD?
So for everyone wondering why the hell MS is pricing the 120GB HDD accessory so high, there's why. They don't want people just picking up a core and upgrading them for cheaper than the elite.
What the fuck is with SKU? It's a product. (Score:5, Insightful)
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Re:What the fuck is with SKU? It's a product. (Score:5, Funny)
Parent
its a SKU ... (Score:2)
http://www.google.ca/search?hl=en&q=define%3A+sku& btnG=Google+Search&meta= [google.ca]
and if you look in the results
A uniquely identifiable line within a product range. A particular product may have many different variation s eg 20 percent extra free, price marked etc. each of these variation would be a unique SKU.
www.applause.hu/terms_e.htm
but i will agree that SKU is generally used to refer to the code of the product, not the product itself.
Re:its a SKU ... (Score:5, Informative)
SKU stands for "stock keeping unit". It has an actual meaning and proper use, but it's always struck me as ludicrous to use it outside of a store stockroom.
When I was in high school (and this was 20 years ago now), I worked as a stockboy in an electronics store. We used "SKU" the way it was intended, just as stockboys probably still do now. Every product has a "SKU number" used like a UPC code to track stock counts, and that eventually got shorthanded to refer to the product itself. (Note that I'm not contradicting you, just adding a little more info.)
It's always annoyed me when I see this in regular life, just like I see games now referred to as "IP's". In most cases, it's a vain attempt at looking "hip", as if you're cool enough to throw around industry-speak. Usually, though, the true origins of such terms come from marketdroids, lawyers, or worse.
There's no reason even for an analyst to use the term "SKU". They're not tracking stock. It actually would make somewhat more sense to use UPC as a generic term meaning "product model". I think terms like this are always annoying, though, and would much prefer it if everybody could just settle on plain English outside of their work environment. Why do all of our casual conversations have to include so much meaningless industry jargon?
"Model" is a perfectly fine word to use. #7 definition at dictionary.com: "a style or design of a particular product". There's no reason to repurpose industry acronyms when we have perfectly meaningful English words already. Unless you REALLY don't have time to utter that extra syllable.
Parent
PS3 Advantage (Score:5, Insightful)
If the PS3 survives its games will end up looking a lot more impressive than 360 games of the same vintage.
Re:PS3 Advantage (Score:5, Informative)
Blu-ray sounds great but what do you need to fill it with. As it is the amount of money we pay to get the game shipped now is a lot. Cost is what's stopping us from making bigger or more diverse games, rather then size of the media again.
The people who are hurt the most by this are the JRPG companies who just explode with FMVs, blue dragon is a 3 dvd game, other then them I've heard no complaints about the size of the media. Hell, The only reasons they are filling up Blu-rays are they are using "stupid" tricks like uncompressed audio for Metal gear solid. I just have a simple question. Now that both systems are out, and we already have seen that the 360's dvd has a higher read speed then the ps3's blu-ray device (overall blu-ray SHOULD be faster, but in these two actual system the 360's drive is faster). Why are you using larger files sizes rather then using the "extra" power of the ps3 to uncompress these files? The simple answer is no, the ps3 isn't that powerful (Insomniac today claims you have 8 cores? funny we only have access to 6 cores).
In the end blu-ray isn't going to be the answer. Sony's system has some good marks, but blu-ray isn't necessary, and the Cell processor is doing more to hurt the developer than it is helping it.
If anything the 360 developer's biggest problem has nothing to do with DVDs, it's due to the fact that the Hard drive is non standard and we can't guarantee using that for caching, but that's a relatively minor complaint in the long run.
Parent
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The ps3 is a expensive machine. For my money it was worth it. At some price point I'm sure it would be worthwhile for most gamers. I only hope it survives to hit that price point.
360 games will be better than PS3 for 2yrs (Score:3, Interesting)
(2) The 360 has symmetric multiprocessors--3 dual-core PPC chips that use the same memory heirarchy, caches etc. That's 6 in-order execution pipes. Compare that to the PS3 which has *one* general processor pipe and *7* (not 8) SPUs which are basically DSPs. One of those SPUs is permanently reserved to the OS so you only get to use 6 of them. The
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Correction, the 360 has 3 multi-threaded cores (think hyperthreading), and the Cell has 1 multi-threaded core plus 7 SPUs. That means the optimal arrangement for the PS3 is to have one general execution thread and perhaps another thread responsible for farming out work
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No, there are plenty of other reasons. Localization for example - being able to offer the same game in multiple locales from the same disk. Something which is very important in the EU, or
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And how much larger is Oblivion than its predecessor? How much larger is Oblivion if you tossed in Shivering Isles? Could Bethesda even produce a 360 "Gold Editi
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Re:PS3 Advantage (Score:5, Interesting)
The PS3 just had the greatest console launch in history in Europe.
Parent
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BluRay disk prices for developers are a few cents more vs DVDs. BluRay disks are much cheaper than multiple DVDs. Publishers and developers HATE multi-disc titles. Needlessly eats into profits - take a million selling game multiply the cost of a second DVD(or even worse third) and you are throwing away a huge chunk of profits.
GameCube games last gen for the most part had developers ju
Re:PS3 Advantage (Score:4, Funny)
Also, 640K ought to be enough for everybody.
Parent
Disappointed (Score:3, Interesting)
I guess I'm just repeating the normal mantra: needs the HD-DVD built in and Wireless built in. Right now it's 480+200+100. I find the price of the little wireless device most eggregious even now and wonder why there are not third party devices out there that can do the wireless.
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Of course, you're right about the WiFi being external primarily because people will pay for it. That said, it's only mar [newegg.com]
Re:Disappointed (Score:5, Funny)
Parent
Why? (Score:5, Insightful)
Releasing a console with built-in HD-DVD would be interesting. Though there are potential reasons to avoid this.
1) Price being too close to the PS3, in some ways validating it.
2) No guarantee of success and thus subsidizing of the HD-DVD drive.
But that said, decided not to include an HD-DVD drive pratically makes the whole thing a wash. Without the HD-DVD drive, all we have is a more expensive premium console that has a larger hard drive, HDMI hookups, and is black.
Without any truly tangible benefit, it shrinks the extremely important price difference between the consoles. My points 1 and 2 above apply in almost the exact same way.
1) Price too close the the PS3, in some ways validating it.
2) Lack of backing of HD-DVD can be seen as implying a lack of confidence in the medium.
The whole thing seems ill-conceived. If they didn't want to release a console with an built-in HD-DVD drive, they could have simply upgraded live and announced a new, larger hard drive alone and perhaps a black case mod for the first 1000 buyers. A whole new SKU for this is a ridiculous waste of resources, while at the same time killing several key talking points for the 360.
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Microsoft has the upper hand for the time being with its large game library and installed base, and after being out for close to a year and a half its probably gotten cheaper to make. If they were smart they would have dropped the p
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2) Lack of backing of HD-DVD can be seen as implying a lack of confidence in the medium.
I think this is the single most important element of the post. If Microsoft aren't giving a thumbs up to HD-DVD that means they think Blu-Ray is going to be the big format. They're saying, whether intentionally or not, that Sony's technology is going to be the 'standard', and Sony's PS3 is the cheapest way to get a Blu-Ray player. By not including an HD-DVD reader Microsoft might have seriously screwed up an otherwise shiny console generation for themselves.
Re:Why? (Score:5, Insightful)
From an article I originally posted here:http://vgecon.blogspot.com/2007/03/purpose-o
There are two alternatives to this. First, you could set a single price; but this is a gamble. If you price too high you will lose sales to people who valued the product less. If you price too low, you lose profit margins from people who would have been willing to pay more. The other alternative is to still set your product at multiple price points but vary each version slightly. An excellent example of a company that uses this tactic is Starbucks. A regular coffee at Starbucks is only around $1.60; but a double foam mocha latte... whatever can cost you upwards of $4.00. In truth, both products cost Starbucks approximately the same amount of money to make. Price sensitive customers will choose the regular coffee, and people who are willing to pay more may spring for the more extravagant drink.
This is what Microsoft is doing with the Xbox 360. Sure, the Premium costs Microsoft more to make than the Core, and the Elite costs them more then the Premium; but it's less than most people think. Microsoft may still be losing money on the Core, but they're probably breaking even on the Premium at this point. At $479, the Elite might even turn a small profit.
Some people have pointed out that the new price tag erases Microsoft's price advantage over the $500 PS3. From a marketing perspective, it may seem that way. From an economics perspective though, things are still very different. The key point is that Microsoft is going to be ready for a price cut far sooner than Sony will be. Before the Elite, a price cut would have meant that they would have to sacrifice any profits from people who were still willing to pay top dollar for a system. A new high end model allows them to maintain their position in the $400 range, while extending their market by dropping the low end of their price range.
I am no marketing expert, so I can't really say what the effects will be there. Economically though, this is a smart move by Microsoft.
Parent
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When I was 10 I did just that. I bought a Sega Genesis because it meant I could get two games right off the bat instead of just one.
:/
Would I do that now? No, but I still was a gamer then and only had allowance money to work with, $100 was a big deal.
Not to mention that a higher price and another SKU only serve to alienate the non-gamers and casuals further.
Blu-Ray (Score:5, Insightful)
It appears to me that Microsoft is acknowledging the format wars are stillborn. Their support for HD-DVD was just about defusing the PS3 anyway, not defeating Blu-Ray. MS already has their license fees secured, regardless of how the little-plastic disc formats fare.
The media victory Microsoft is after, is digital delivery.
Prices (Score:5, Insightful)
That "validation" of the PS3 strategy by way of price is a bit misleading, though. Sony equates the PS3 to fine equipment whose price indicates its value. But it's a genuinely expensive device to make. What the PS3 price points have proven to the people who figure out the prices of consoles is that consoles have been too cheap and the market could sustain them at higher prices than previously thought.
Other very expensive consoles have gone down in flames for home use... but the median price for the majority of consoles at the market at any given time has been a $200 - $250 sweet spot. The only thing that Microsoft and Sony have done is show that the sweet spot can be coaxed higher.
What I don't understand is why Microsoft isn't playing a price war yet. They've got the biggest userbase for this generation, most established games (excluding Wii's ability to play Gamecube games), and they're turning a profit on current consoles sold. Sony's machine costs $800 and putting pressure on them to lower a price point could hasten any future demise... if it's in the cards.
My only stab at trying to understand is that Microsoft eventually wants to buy the Sony gaming division, but I'll be the first to suggest that's an outrageous claim. Hmmm...
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And conveniently not mentioning the PS3's ability to play PS2 and PS1 games.
At the immediate moment, the 360 does have more n
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The PS2 definitely had more show stopping quality games than Gamecube and is a great asset to the PS3's playable library... PROVIDED that the recently crippled backwards compatibility gets continually less crippled with time. On that same token, I certainly want to see much better backwards compatibility on the 360 at a much faster pace.
AFAIK, Wii's Gamecube backwards compatibility does not exist in a software
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Elite looks like a bad deal (Score:2)
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To my way of thinki
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Anyway, PS2 sold 100+million units, lasted for 6 years and is still selling faster than the 360 and ps3 put together. If you assume the 360 will last as long as the Xbox and the PS3 will last as long as the PS2 then your price per year is the same but Sony's loss per unit can be much higher and sill break even.
PS: It's still a little early
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All but the disc space argument could have been made for the Xbox over the PS2. It's entirely about the games and PS3 is far, far behind in that area with every chance that
My problem with upgrading to the Elite... (Score:2)
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It appears to me that..... (Score:3, Insightful)
The pricing virtually eliminates premium sales. No one is going to pay $400 for the premium w/ 20GB instead of $480 for the elite w/ 120GB when the 120GB drive is sold separately for $200. Now there's actually a choice for the consumer at the $500 price point. Do I buy the 360 with the larger hard drive or buy the 20GB PS3 and have a Blu-Ray player?
Leave it to Microsoft to make the $600 PS3 look like a good deal. $480 + $100 WiFi + $200 HD-DVD = $780.
Does it really matter? (Score:4, Insightful)
I mean really, you can tell me for instance that the PS3 will do everything from clean my laundry to wash my car but at the end of the day it doesn't have my Gears of War. It doesn't have my Crackdown. There's no Forza Motorsport. There's no XBLA. To top it off it's also a lot cheaper for me to get to play a large library (and ever-growing...just check out upcoming releases like The Darkness, Bioshock, and others) of great games that look spectacular with a superb online system. Can I play Blu-Ray movies? No, but then, did I really want to buy a game system to play movies?
It's part of the same reason the Wii is selling. It's cheap, it plays good games, and nobody gives a fuck if it can't wipe your butt for you, too. So what does this new 360 do? Who does it cater to? People that feel they have to have the "extra shiny" version of a console to feel superior to other people. The other people are those interested in the Marketplace for downloading things which means there isn't a value comparison with the PS3 since the PS3 doesn't have access to the Marketplace...the very source of content the interested users wanted in the first place. The rest of us just get the Premium and rock on because it lets us play our games which is what WE wanted in the first place.
There will be a true features/price comparison between the 360 and PS3 when the PS3 has a large library of awesome games (and for the cross-platform ones like DMC4, VF5, and others it's going to need to be worth coughing up several hundred dollars for a better experience or we're still going to get them on the cheaper system that gives the same or better experience) that make it worthwhile to have for playing games.
Anyone seriously interested in a media server has probably already gotten an Apple product or some other personal computer solution since they tend to be better at it overall. This is all for show and to cater to an elitist (though not necessarily "elite") portion of the interested 360 population, not to the rest of us who buy game systems for playing games.
Here's my take on the reasoning for it (Score:3, Interesting)
Whilst cheaper to produce however, MS will still initially make a loss until they're shipping en-masse. Therefore, I'd say MS is releasing the elite with the new hardware iteration as a method to ship said new hardware without taking as high a monetary loss. Essentially, what this means is that they're using the elite as a tool to bring down cost of production of the new hardware iteration, so that 6months down the line, they can start building the premium version with the new hardware so cheap that they can announce a massive price drop on the core and premium.
Whilst the Elite may indeed look like an idiotic short term decision, if this is their plan then by the end of the year you could see MS shifting the 360 perhaps even as cheap as the Wii is currently. This is something Sony wont be able to compete with any time soon, they've already shafted backwards compatibility in the name of reducing production costs for the European release of the PS3, by xmas 2007 year I'd be suprised if the PS3 had dropped at all, but again, I bet the 360 is selling for current Wii prices. As an aside, I'd guess the Wii will be cheaper again by then, Nintendo is shifting so many units and never made a loss per-unit in the first place so a price cut would be an easy hit for them by xmas 2007.
I don't know US prices off by heart, but my prediction for xmas 2007 console prices in the UK is something like:
Wii - £149.99
360 Core - £169.99 (or possibly even written off altogether)
360 Premium - £199.99
PS3 60gb - £399.99
Re:I Honestly Can't Believe This Is Real (Score:5, Funny)
At first it seemed to be dope due to the green color. At closer inspect, though, it turns out that it's dollar bills...
Parent
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The price comparisons of the 360 and PS3 just got a lot more complicated, and not in Microsoft's favor. The new SKU is arguably less functional than the closely priced $500 PS3.
I'm sure the idea looked good on paper, but ultimately I can only see this as hurting Microsoft's position.
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I definitely agree that this elite is not really worth the price, but they still have the other models available, so I don't see how this could hurt them, per-
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