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PSP Japan release rumour
- Thread starter Jonnyram
- Start date
quick economics lesson folks. Doing eco in my masters in case u r wondering.
Sometimes it's better to sell goods in a bundle because it allows you to maximize the take from the consumer as well as being more efficient and reducing your costs.
Simply, u can get the consumer to buy stuff they don't necessarily want but must get in the bundle.
Most of that bundle bar the actual device itself probably doesn't cost Sony a whole lot of money. My guess is somewhere in the range of $10 - $20 total.
So even if they charge $200 for a PSP only and are losing say $50 on the PSP (cost to Sony $250) itself they might get some back by charging $25 for stuff that only costs them $10. Net loss = $35.
But some of that loss can be offset against the fact they don't have to ship, warehouse, sell etc some of the other goods in the bundle.
So, if this is the price, the economics of that price may surprise u. This report may help
http://www.accenture.com/xd/xd.asp?it=enweb&xd=_ins\researchreportabstract_193.xml
Sometimes it's better to sell goods in a bundle because it allows you to maximize the take from the consumer as well as being more efficient and reducing your costs.
Simply, u can get the consumer to buy stuff they don't necessarily want but must get in the bundle.
Most of that bundle bar the actual device itself probably doesn't cost Sony a whole lot of money. My guess is somewhere in the range of $10 - $20 total.
So even if they charge $200 for a PSP only and are losing say $50 on the PSP (cost to Sony $250) itself they might get some back by charging $25 for stuff that only costs them $10. Net loss = $35.
But some of that loss can be offset against the fact they don't have to ship, warehouse, sell etc some of the other goods in the bundle.
So, if this is the price, the economics of that price may surprise u. This report may help
http://www.accenture.com/xd/xd.asp?it=enweb&xd=_ins\researchreportabstract_193.xml
Chittagong
Gold Member
seanoff said:
Good thinking. Now, if your next economy class is about the wholesale and retail margins, you'll see that the loss would be significantly higher per unit if the cost was 250. Even if the cost was 200 as was the consumer price, the loss per unit would be still considerable.
boutrosinit
Street Fighter IV World Champion
That list is absolute bollocks.
That's all I'm saying.
Also PSP will definitely *not* be out this year.
That's all I'm saying.
Also PSP will definitely *not* be out this year.
well done smart arse, i was using those figures as an example not as the actual numbers.
If we knew the actual numbers, it of course would be much easier to do the math correctly, but since we basically have no idea i was using familiar numbers, it makes it easier to understand. I could also argue i was using final numbers for total cost including margins, holding and transport costs but i was actually just using familiar numbers as an example.
The actual math involves the weak law of large numbers, stastitics and algebra and is a bit above the level of discussion required here.
If we knew the actual numbers, it of course would be much easier to do the math correctly, but since we basically have no idea i was using familiar numbers, it makes it easier to understand. I could also argue i was using final numbers for total cost including margins, holding and transport costs but i was actually just using familiar numbers as an example.
The actual math involves the weak law of large numbers, stastitics and algebra and is a bit above the level of discussion required here.
boutrosinit
Street Fighter IV World Champion
Midas said:
People who are actually working on the fucking thing
Sure, but Sony has never done that before with consoles. You need a memory card to save games, but you have to buy one separately. Thats another economy 101 - Make your console look as cheap as possible by omitting essential items and selling them separately. Pack-in games have also mostly gone bye bye from manufacturers to keep the BOM down.
I find it odd for them to bundle a slip cover and cleaners - ideal accessory sales (either from Sony or accessory licensees). Also if you need a memory stick to save games then sell one. And remote control? I know it multifunction, but for PS2 you bought the DVD remote separately. You could do the same for mp3. Or maybe you need the remote for playback, and they'll sell an LCD remote for extra later on (I'd buy one
I'd love that to be the real price and release list - thats a good line up IMO. But its almost too good to be true. Ridge Racer and Minna no golf at launch? Yum yum!
klaw, they sort of did with the PS2 because the could have made dvd playback a pay later item ala the Xbox and controllers don't really need to be in the box if thats the way they decided to go. (i know the last one would be massively unpopular but it is an option, not a good one)
The numbers also suggest they'll sell far more cleaners and covers bundled than unbundled and depending on the cost structure it might be more profitable to do so as a part of the bundle.
I'm pretty sure they'd have a pricing unit full of economists with all manner of models etc getting them the best outcome given whatever constraits they were given.
The numbers also suggest they'll sell far more cleaners and covers bundled than unbundled and depending on the cost structure it might be more profitable to do so as a part of the bundle.
I'm pretty sure they'd have a pricing unit full of economists with all manner of models etc getting them the best outcome given whatever constraits they were given.
JackFrost2012
Banned
cybamerc said:
Fair enough. If someone told me that they knew the manufacturing cost of the PSP, well, I doubt I'd believe them, too.
If only Sony would announce a PRICE POINT for their system LAUNCHING IN A MONTH then these sorts of threads could finally shut down!
JackFrost2012
Banned
boutrosinit said:People who are actually working on the fucking thing
We should compare sources! ;D
I think that people claiming the PSP costs Sony 250/300 or more dollars are totally overstimating the situation.PSP is made exclusively with Sony technology,a few of these techs are even used in other Sony products (audio),plus there's not a huge R&D behind the hardware itself as it's the case of a new console (PS2,PS3 etc) a lot of things are recylcled from other products even the PSX for the interface.Sony developed PSP in 18 months they said.The only thing that Sony does not control and could impact the price of the console is the screen provided by Sharp (or Samsung?) but here we're talking about a contract for all the PSP lyfe and for millions of parts.With this kind of contracts manufacturers make special prices for the single unit knowing they can offset the low margin with the quantities and duration of the deal.So I don't really think that Sony will lose that much money if at all on the PSP even at a 199$ price point.
Panajev2001a
GAF's Pleasant Genius
Elios83 said:
The price estimates I hear on the unit are around $350 per unit.
So at that price they would have a loss, but not the $250-300 kind of loss per unit that people fear.
mrklaw said:I find it odd for them to bundle a slip cover and cleaners - ideal accessory sales (either from Sony or accessory licensees). Also if you need a memory stick to save games then sell one. And remote control? I know it multifunction, but for PS2 you bought the DVD remote separately. You could do the same for mp3. Or maybe you need the remote for playback, and they'll sell an LCD remote for extra later on (I'd buy one
Packaging the memory stick is a necessity. There has to be a way to save game data without having to buy a peripheral. That's the way it's been with pretty much every handheld in the past, and Sony would be asking for too much if they expect consumers to buy something that's standard in handhelds. As I said before, it's the same as Sony bundling a controller with every PS2.
The remote isn't a wireless infrared remote. It's those cheap round pieces of plastic connected to the headphones that come standard with pretty much every portable CD player. They have a stop/pause/play button and make it easier to browse through music while the unit is in your pocket, backpack, bag, ect..
JackFrost2012
Banned
Panajev2001a said:
It's worth pointing out that if the PSP costs $350 to make and Sony sells it for $250, they are losing more than $100 per unit what with shipping, retailer margins, etc. Small, yes, but.
The same thing could've been said for the original Playstation, though -- the popular consoles that preceeded it didn't require extra hardware for saving, but that didn't make Sony pack a memory card in the box. The opportunity for additional profits is too great.Insertia said:
Y'know, PS1 was the first mass market console to force one into buying a memory card to save games... In fact your whole paragraph could be reflected back to 1994...Insertia said:
Packaging the memory card is a necessity. There has to be a way to save game data without having to buy a peripheral. That's the way it's been with pretty much every console in the past, and Sony would be asking for too much if they expect consumers to buy something that's standard in consoles. I said before, it's the same as Nintendo bundling a controller with every SNES.
Panajev2001a
GAF's Pleasant Genius
JackFrost2012 said:
At that price though they can also afford to increase production volume as they will not risk to have many units sitting in the shelves.
I expected them to release the console at a bit of a premium in Japan, so that might be the price for the U.S. launch of the console.
Still, in Japan they will have no problem selling the console and with that price they will sell a shit-load in the U.S. and in Europe.
Higher production volume leads to lower manufacturing costs which leads to lower loss per unit.
if they're bundling a memory stick and headphones, it's presumably because they want everyone to try the music playback. sony seem pretty set on selling psp as a convergence device rather than a pure game machine. i assume they intend to sell music downloads, and i'm sure they'll sell bigger memory sticks...perhaps the potential profits outweigh the costs.
and if that's the real price, i'll buy one at japanese launch. and then another american one if i need it.
and if that's the real price, i'll buy one at japanese launch. and then another american one if i need it.
Lord Error
Insane For Sony
1337 spong sources that are never named.
jarrod said:
Uh... PS2,GC,DC... all also didn't include saving devices. They were all banking on making extra money from them.
Sony hasn't ever packaged a mem card with any retail console bundle that I can remember. Why would they start now?
FWIW, I could see Sony bundling a small MS in with PSP. It's not like they can get huge accessory sales by jacking up the prices anyway with MS being a nonpropietary standard, and it'll help push PSP as a music player early on.
This price doesn't sound too bad either, it's about what I'd expect PSP to cost if SCEI decided to take a loss and it's only 10,000 yen more than DS. I wonder if we can expect a proportional (over the DS) US price of $249 then?
This price doesn't sound too bad either, it's about what I'd expect PSP to cost if SCEI decided to take a loss and it's only 10,000 yen more than DS. I wonder if we can expect a proportional (over the DS) US price of $249 then?
Any new info regarding the credibility of this rumor, Jonny?
If this is true, my PSP launch day will look like this:
PSP (24,800)
Minna no Golf Portable (5040)
Ridge Racer Evolution (5040)
Lumines (3990)
Total: 38,870 yen
Overall I'm not very excited about PSP yet but the consumer whore in me still can't resist.
My DS launch day is looking like this so far:
DS (15,000)
Sawaru Made in Wario (4800)
Super Mario 64 DS (4800)
Daigassou! Band Brothers (4800)
Chokkan Hitobude (3800)
Kimi no Tame Nara Shineru (5040)
Mr. Driller Drill Spirits (5040)
Ridge Racer DS (import) ($39.99)
Total: 43,280 yen (+ $39.99)
Wallet = pain!
If this is true, my PSP launch day will look like this:
PSP (24,800)
Minna no Golf Portable (5040)
Ridge Racer Evolution (5040)
Lumines (3990)
Total: 38,870 yen
Overall I'm not very excited about PSP yet but the consumer whore in me still can't resist.
My DS launch day is looking like this so far:
DS (15,000)
Sawaru Made in Wario (4800)
Super Mario 64 DS (4800)
Daigassou! Band Brothers (4800)
Chokkan Hitobude (3800)
Kimi no Tame Nara Shineru (5040)
Mr. Driller Drill Spirits (5040)
Ridge Racer DS (import) ($39.99)
Total: 43,280 yen (+ $39.99)
Wallet = pain!
You can't take pictures with a digital camera without a memory card/stick. So they give you a tiddy one - they know you'll need to buy a larger one anyway.
You can play games without a memory card - you just can't save them. You could argue that its semantics, but its enough of a differenct for 'no memory card included' to be the standard these days.
You can play games without a memory card - you just can't save them. You could argue that its semantics, but its enough of a differenct for 'no memory card included' to be the standard these days.
Chittagong
Gold Member
john tv said:
boutrowned!! = spongowned = business as usual ?