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March 2015 NPD (U.S. Hardware) Predictions - Closes April 14th
- Thread starter donny2112
- Start date
They were breaking even 2 years ago at $399, and were slightly profitable in the following months afaik.
2 years later, they should definitely be able to drop by $100 and either be breaking even or a very small loss.
http://m.ign.com/articles/2014/05/23/ps4-already-profitable-for-sony
2 years later, they should definitely be able to drop by $100 and either be breaking even or a very small loss.
http://m.ign.com/articles/2014/05/23/ps4-already-profitable-for-sony
Graphics Horse
Member
Weren't they being sold at 399 with a game or two last winter? I'd expect a bare bones 299 model, and some bundles going up to 399. Introducing a 1 tb version at a higher range is a good way to make back any loss, they aren't much more expensive to build.
All these posts about how Sony cut the price of the PS1/PS2 - have to take into account that Sony was a different company 15 years ago. 15 years ago - they were able to make these decisions because they were dominating consumer electronics (tv's, walkmans, camera's/camcorders, computers) and as a whole were making money. They even had a different market standing as the innovator/leader of consumer electronics. Those days are long gone and Sony has to be very careful about what they do with their new golden egg.
I hope I stand corrected on this - but I doubt Sony drops by $100 - not now. But if they're in the number one spot right now and are $50 more than the competition - why would you drop by $100 - it just doesn't make sense. They have the product, mindshare and sales victories through the majority of the year. I think they stay priced above Xbox since they have a higher perceived value with power, brand, etc., etc.
Bundle software (not PS Plus) and maybe an extra controller/camera and they're good. If they have a hardware revision/redesign and throw a 1TB drive in there - same price (but add a game or two).
I hope I stand corrected on this - but I doubt Sony drops by $100 - not now. But if they're in the number one spot right now and are $50 more than the competition - why would you drop by $100 - it just doesn't make sense. They have the product, mindshare and sales victories through the majority of the year. I think they stay priced above Xbox since they have a higher perceived value with power, brand, etc., etc.
Bundle software (not PS Plus) and maybe an extra controller/camera and they're good. If they have a hardware revision/redesign and throw a 1TB drive in there - same price (but add a game or two).
I completely agree with your statement but the point that I (and many posters) am making is that from a business standpoint - you don't drop the price of your product/service when it's doing good, period. In in Sony's case the PS4 is doing very well and breaking records. Dropping 25% of the price when sales are strong just doesn't seem like the right business decision.
Graphics Horse
Member
It will only happen if they think it'll improve sales. If they want it to be PS2 level strong (> 20M per year) then they have to cut the price.
Chobel
Member
Because it's not just about beating the competition, it's about increasing market share, brand growth and reaching new audience (the casual audience who won't pay $400 for a console), which means more profits long term.
All these posts about how Sony is a different company 15 years ago have to take into account that the PS4 is a different system than the PS1/PS2/PS3. It didn't begin its life as a loss leader and was designed to drop in price faster. If it cannot, then that design failed.
I do not believe that design has failed.
I get that and I do think they should drop the price. I don't think it needs to be $100. $329 is also an attractive price point. They'll have to drop the price of the ps3 (and Microsoft the 360) as well. Which is another (potential) profit shrink.
Chobel
Member
If dropping the price leads to better profits in long term, then it's the right business decision.
Both sides of this argument have valid points. We'll just have to see what happens this summer/fall.
Can we start a poll? =P
Of course it is - but if it doesn't than you don't. That is the unknown and the point of the argument.
Why do you sound so concerned like you're a share holder of Sony or something? A price drop to $299 for the PS4 isn't going to bankrupt the whole company or something. They'll still make money with PS Plus subscriptions, game licenses and others. In short, price drops are more important in the long term business strategy.
LOL - sound concerned? Different takes on business is that really hard to understand. No one said they were going bankrupt. Neither you or I know what their ledgers look like so you thinking you know definitively how they will turn profit in the long term is questionable. I'm commenting on what I think they will do/not do. It's a forum where people have discussions and offer opinions.
Right bad situation and not selling consoles. Now they're in a good situation with the PS4 and selling tons. So.....why drop exactly?
Because they CAN if they want to.
Also, forgort to mention. They lost money on each PS3 sold and they still dropped the price for 100$.
Now they're in better situation then before.
SnowFlakeCake
Member
Thinking about it, $299 does seem very plausible. Reality is that the console has been out for some time now and by the time we hit November it will have been two years since release. Deals for the console here in the UK and in the US already include a game for the price, that too usually new games so $299 could indeed happen. Sony need nothing at all this holiday season with a price drop, 3rd parties are going to take care of business quite nicely in US leave alone WW where it will be a bloodbath.
You mean fastest selling?
It's far from the best selling.
And anyway your point about Sony being the fastest selling doesn't have much to do with my point. The Nintendo Wii was the fastest selling console of all time yet it couldn't match the sales of the PS2.
Based on current conditions the PS4 is not on track to match or exceed PS1 or PS2 LTD figures. A price drop will help and Sony are certainly in a good place to start offering deals or discounts lower than $399.
slavesnyder
Member
Could you please tell me the difference?
I guess afterwards it's obvious, but right now I don't get it.
Welfare
Member
Fastest selling = Selling more than the others launched aligned
Best selling = Best selling in total
Best selling means LTD. Like PS3 right now. Fastest means comaprison between PS2 at the same point as PS4 is right now
IAmRandom31
Banned
Right now I think Sony sales are coming from current hardcore gamers who want that new console, people who simply don't see the Wii U or Xbox One as a viable console and some core gamers.
Dropping the price to $299 brings in the impulse buyers. PS4 sales would skyrocket and with it comes your PS+ subscriptions, increase in first party software sales, more PS Now subscriptions, PS Music subscriptions and so on and so forth. The small amount they might lose on each console would quickly be made up by the above.
Simply put, the more the merrier
KillerMan91
Member
Did you ignore the rest of my post? Price cuts don't automatically mean less money. What you lose with lower profit margins of hw you can gain from elsewhere. They make price cut if it makes them more profit. That has zero to do with the financial situation of the company. If this was PS3 situation then their financial situation would matter (they cut the price to gain market share at the expense of profits)
We're all predicting here, but Sony will definitely still make profits from the PS4, although it may not be the hardware itself. At launch, Sony was selling the PS4 at a slight loss, but a few months later, it was actually profitable. Fast forward a year and say, 10 months, and we can be quite sure that when Sony does a price drop, the PS4 will cost around $299 to manufacture, maybe slightly more. So it's a logical step for Sony to take a small loss for a while for the long term benefits.
The Mad Draklor
Member
A $100 price cut is not out of the question. The question is which option yields the most revenue? If Sony cuts the price by $50, the company will get $50 more per console than if it cut the price by $100. However, a $100 price cut will create a lot more buzz. Not only will it lead to a larger increase in sales, but it will also increase software sales and PS+ subscriptions. If Sony's projections say that a $100 pricecut will yield more revenue, then the PS4's pricetag will decrease by that amount.
Welfare
Member
Just made this. Might be useful for some-
If possible, could you send me your PS2 sales data? I only have up to 2010 and would like to have more a more complete spreadsheet.
2012 is estimated on the back of the final LTD number of 46.4m
2011 is estimated using leaked/percentages/other data.
2000-2010 is very accurate NPD data.
I'll put together a spreadsheet and send them over to you soon. Need to sleep first!
Welfare
Member
Alright, thank you!
Daphnes Nohansen Hyrule
Member
[Bloodborne] 220k
PS4 400k
XBO 296k
Thank you aquamarine <3!
PS4 400k
XBO 296k
Thank you aquamarine <3!
You may be right, but it is also about making a profit. You decrease your profit margins when you do a price drop. Besides like it has been mentioned, they have no need to drop the price right since they currently dominating the console space right now. There also doesn't seem to be a decline in sales worldwide. It would make no sense to cut into their profit margins, currently.
Wrong, Ps4 costs only ~$381 to build and it was sold at $400 day one. Profit of $18 at launch
http://ps4daily.com/2013/11/playstation-4-cost-to-build/
article date said:
Rob Jackson said:
ArkhamFantasy
Member
Could Bloodbourne outsell the PS4 version of Battlefield?
That is an estimate which doesn't take into account R&D, marketing and sales administration costs.
Here is what Sony themselves said -
http://www.eurogamer.net/articles/2...-recoup-playstation-4-hardware-loss-at-launch
And Sony are now saying they are profitable on PS4 hardware and have been profitable on a hardware unit basis since the beginning of FY2014.
Also the PS4 component suppliers are in contracts with Sony that allow for price depreciation over time.
So yes, PS4 is profitable now.
Just made this. Might be useful for some-
Man...the PS3 fell off a cliff really fast in the US.
It's too expensive.
Like ZHuge said, this doesn't take into account R&D and other stuff. Either way, this further proves my point that a price drop to $299 is good for Sony and the PS4.
PS4 manufacturing price is now lower. Sony talked in Q1/Q2 2014 that that they manged to reduce price more quickly than they anticipated.
Just made this. Might be useful for some-
So, in 2014 PS4 has sold better than PS3 managed even in its best years [in the US]. Interesting.
It is also sad that PS3 sold so poorly in 2013. In that year Sony released IMO too much awesome 1st party exclusives for that system [GOW:A, TLOU, Beyond, GT6 and Puppeteer, MS had jack shit for x360 [Gears Judgement]]. But moving some of them to PS4 would not have increased PS4 sales I think. Console was sold out regardless of games.
It baffles me that Puppeteer is still not ported to PS4.
Well, I said in one of my previous posts that the XB1 momentum didn't drop off a cliff, or anything. It didn't suddenly dry up and vanish by any means. But it doesn't seem as good on a weekly level as the previous month. Hasn't really been any big standout push, the Halo bundles are the primary consoles being sold, but some of our stores are still working through their AC Unity bundles, and they're not a totally 'endangered SKU' so to speak. We're not getting more of the AC bundles shipped to us, but they still haven't cleared out.
Or vita for that matter. Puppeter ps4 as a budget title $20 would be welcomed
So most of those AC bundles were from the holiday season, right? It's amazing how much Microsoft overshipped. How is the Halo MCC bundle doing now that the AC bundles are starting to be out of stock?
Just made this. Might be useful for some-
What's the prediction of USA PS4 sales in 2015? 6-7mil if the $50 pricedrop comes before holidays? 6mil without pricedrop [but with bundled games]?
If the previous year's sales are any indication, the PS4 sales in the US is slightly more than a third of global sales, roughly 36%. So if we predict that the PS4 will sell through 36 million at the end of this year, the cumulative sales in the US will be around 12.9 million. I'm not sure what the sales in the US were as of 31st December 2014, though.
Our DCs have had a just absolute ton of those AC bundles since December, and we're finally bleeding them down to the last vestiges. And really, even that's become a crawl, because the Halo bundle has largely just replaced sales of the AC bundle, so there's no increase in speed of sales, at all.
I see. This is in line with what I've been seeing on the Amazon hourly charts for the past few days. The Halo MCC bundle effectively replacing the AC bundle. Now it all makes sense. Thanks a lot for the info, Abdiel.