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Sony Unconcerned With Xbox360 Price Cuts >
2008/09/05 12:21:54: Posted by DM
Julie Han of Sony's Corporate Communications Division told Gamasutra that while MS will see a lift in sales due to the Xbox360 price cuts, Sony is unconcerned because it is not sustainable in the long term. She maintains that consumers will realize that even though the PS3 is more expensive, it offers a much better value in the long view.

"We'll obviously see the natural lift [in sales] with the price cut -- but how sustainable is that in the long term? We're really confident that consumers are making choices driven by value," she says, "and we know PS3 offers that value across the board, with the built-in Blu-ray player the broadest and deepest software lineup in the industry, with LittleBigPlanet, Resistance 2, Motorstorm [Pacific Rift]... we're quite confident our holiday sales will be good."

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Written by Kenny K on 2008/09/05

They are so unconcerned that they typed out a novel to explain it! Kidding, kidding.

What does anyone expect them to say, "we're scared sh!tless"?? It's the right thing for them to say.
Written by PimpDaddy on 2008/09/05

I don't think Sony is concerned to tell you the truth. Microsoft and Sony are fighting for the same hardcore demographic. Hardcore gamers are willing to pay $300.00 - $600.00.

I think the company who should be concerned is Nintendo. Because now here in the US Microsoft can directly compete with them for the casual market at the $199.00 price point.
Written by Kenny K on 2008/09/05

lol no.

No way should Ninty be concerned at all about the price drop. The Arcade pack has been only $20 more than the Wii for the last year, and it hasn't effected the Wii in the least. The demand for the Wii has more to do than it's cost alone.

I agree about sony though, I think they are more concerned about making a profit than keeping up with MS in marketshare.
Written by PimpDaddy on 2008/09/05

I have to disagree with you Kenny k. I'm telling you that sticker price of the Arcade will make a difference come holiday season. I think the Wii is showing signs of slowing down. We shall see...
Written by madgunde on 2008/09/05

I'm with Kenny K on this one Pimp. The people buying the Wii don't seem to be interested in what Microsoft or Sony have to offer at all. Sony on the other hand is certainly having meetings behind closed doors to decide how they want to play this. I'm sure it wasn't completely unexpected by Sony, so in that respect they're not concerned, but I'm sure they've run the numbers to decide what's going to cost them more, reacting to this price drop or losing the sales.
Written by Kenny K on 2008/09/05

In no way am I denying that the new low price won't open up a new market for the 360. However I don't see it eating into the Wii's sales. The Wii is in a pace of it's own, people buy it for many reasons.

Sony had to know, as everyone else did, that MS was going to drop the price this year. Like madgunde said, they probably evaluated what is the biggest loss: $$ per system sold or marketshare. They'll probably announce a bundle.
Written by PimpDaddy on 2008/09/05

Sorry. I still see the $199.00 price tag as competition for the Wii. I just think as time goes by more and more people will start going with the 360/PS3. HDTV and Broadband internet adoption will continue to grow and the Wii will show it's age more and more and the hype/it factor will fade.

But thats my opinion. We will see...

Written by Kenny K on 2008/09/05

I would love to put $$ on a bet with you Pimp ; )
Written by PimpDaddy on 2008/09/05

How bout we bet a game of the other persons choosing? A year from now if the Wii marketshare hasn't gone down and the 360 marketshare hasn't gone up you win. If Wii marketshare is down and 360 marketshare is up I win. Deal???
Written by madgunde on 2008/09/05

@ PimpDaddy

Longer term I do agree it will probably make some kind of difference, but I was thinking more short term. I also feel that the Wii will not be able to maintain it's sales momentum longer term as more people migrate to HDTVs and the Wii's hardware limitations really start to show. I just can't help feeling though that the majority of Wii buyers are people who either wouldn't have bought a 360 or PS3 anyway, or will end up getting a 360 and/or PS3 in addition to a Wii.

Pimp, you might want to clarify the scope of market share. Like monthly unit sales because market share can also mean total install base, no? I suspect the 360's share of the install base is going to continue to decline since they started at 100% and as time goes on, it's going to continue to erode until it approaches the weekly/monthly unit sales market share.
Written by blacktiger on 2008/09/05

Yea man they been beating Xbox 360 for while now, and with all the lineup, i can see them outselling 2-1 !!!

But as long as 360 and PS3 beats wii, i'm good !!!
Written by Sky on 2008/09/05

360 price drop won't effect wii in the least bit.. the wii is the "in" machine. even being more expensive then the low end 360.. it wont even matter.
Written by Xenos on 2008/09/05

@ madgunde:

The Wii's tech has shown it's age since day one compared to the ps3 and 360. I really don't think that the average Wii consumers cares about graphics, HD, or how advanced the games are.

The Wii's momentum will stay high, at least until next year.

Also, the 360's marketshare is not seen as a "decline". I know that you weren't trying to twist anything as a negative, but I believe you are referring to the amount of the overall pie that MS takes up. You're mistaking marketshare (install base) to the overall market (which all 3 consoles make up). Yes, before the other two entered the scene, the 360 had 100% of the market, but just because the Wii and ps3 are on the scene, this does not mean that MS' hold the market will be at a constant decline. Overall, the marketshare of Ninty, Sony, and MS will continue to climb. Not sure if I'm explaining it right, but I hope it helps.

The thing that you guys need to remember is that we're almost 3 years in this generation. Regardless of the Wii's momentum slowing down or not, the console markets will probably stay in line to how they are right now, but we'll see each console expand it's own share of that market accordingly. Meaning, the Wii can slow down the day after x-mas, and it will still be far ahead of the 360/ps3.

I think Ninty will have a harder time convincing these mom, dads, grandmas, etc. to buy their next system. For an audience who doesn't care about the latest tech, few of them would have any reason to pick up the newer Wii2, if their first Wii is still good enough.

@ Pimpdaddy,

I'd happily take the bet, but like madgunde said, there needs to be some structure behind the bet. There really is no way to determine how much impact the 360 will have on the Wii's marketshare. Especially when we know both the 360 and Wii will go up in marketshare, regardless of their pricing structure.

We can always make a bet if the 360 will outsell the Wii between Sept 08 to Sept 09.

I say the Wii stomps the 360 during this year and I hope you're ready to buy me that game.
Written by PimpDaddy on 2008/09/05

I'm not willing to bet on the 360 outselling the Wii. We need a better structure to this bet. Let me think on that. Any feedback is appreciated. But I won't back down...
Written by Xenos on 2008/09/05

Well see, outside of that, I can't think of anything.

There's no way to tell how many people who would have purchased a Wii, picked up a 360 instead because of the lower price.
Written by madgunde on 2008/09/05


When you're talking market share, you're dealing with a pie that totals 100%. Therefore, it's impossible for all competitors to have their market share go up in the same time frame. Normally I think when referring to market share, people talk about unit sales over a given time period (ie: weekly, quarterly or annual sales). But it can also be used to compare all time sales. In this last scenario, if we looked at the 360's market share the day before the PS3 launched, it was 100%, since they had no competition, so therefore 100% of next-gen consoles were Xbox 360s. The day the PS3 launched, Sony began to chip away at that 100% as more and more people bought PS3s. Likewise when the Wii launched, Nintendo began taking over part of the total pie as well.

The day Nintendo had sold as many Wiis as MS had sold 360's, their market shares were neck and neck, but obviously since then, the Wii's share is now much higher as they continued to outsell the 360 by a large margin. Currently according to Videogamecharts, the lifetime unit market share numbers are Wii 47%, 360 30.4% and PS3 22.5%. So essentially, in 2 years, Microsoft's overall share has shrunk from 100% to about 30%.

Looking at weekly unit market share, using videogamecharts latest figures (I know they're not that accurate, but it's just for illustration purposes), total next gen consoles sold for the week ending August 31 was approx. 567,000 units. Of those, the Wii made up 51%, 360 was 18% and PS3 was 30%. Assuming those weekly market share numbers didn't change much, the 360's unit share of the overall install base will continue to drop lower than the 30.4% it has today until it approaches 18%.
Written by madgunde on 2008/09/05

So lets say the 360 price drop really boosts sales so next month and every month going forward it manages to increase it's weekly market share 5 points at the expense of the Wii, so the 360 is 23% and the Wii drops to 46%. From a weekly standpoint, the 360 would have gained market share on the Wii, but from an install base unit share, because the Wii is still outselling the 360, they would continue to take more of the market from the 360 and therefore the 360's overall install base market share will continue to drop.

This is why it's really important that PimpDaddy be very specific about what market share numbers/timeframe he's talking about, and should also specify who's data will be considered to be valid, so there's no arguments later if the data from one source doesn't agree with that from another source.
Written by PimpDaddy on 2008/09/05

We can go VGChartz. What I propose is we look at the sales numbers for the past year for boht the Wii and the 360. Total up the sales for the next 12 month period. And see hwo the percentages compare to the prior year. If the 360 sells a greater percentage of consoles and the Wii sells a lesser percentage of consoles then I win the bet. If it's the opposite Xenos wins the bet.

I mean Microsoft has lowerd the price. The Wii is finally meeting demand thanks to increased manufacturing. Lets do this!!!
Written by arthur56k on 2008/09/06

the price cut IMHO will do little to hamper the wii momentum, but if MS play their cards right, they may end up selling more consoles than Sony can for the remainder of the year.

they will need games and marketing
Written by Xenos on 2008/09/06

@ madgunde

I'm sorry but you're really confused. There is the overall market (the "pie") and everyone's "share" of that market, thus marketshare.

Please don't try to argue with me on this because you really are wrong. The size of the pie grows based on how much the 3 sell, this would represent the overall video game market growing. Each company's marketshare will grow as their install base grows.

I really don't see what's so hard to understand. You're idea of market share "weekly, quarterly or annual sales" is horribly wrong. Those would be sales periods.

So yes, MS' had 100% of the market before the ps3 and the Wii launched. And during this gen, both Sony and Ninty have taken more of the overall market from MS, with Ninty now holding the majority's stake. However when the ps3 and the Wii were launched, the overall market itself also grew to accomodate two more players in the industry. The pie ever growing, if it wasn't than the video game industry wouldn't be growing in sales year after year. While the pie is growing, Ninty, Sony, and MS will continue to grow their marketshare by growing their install base.

Understand now?

Also lol @ VGCharts, videogamecharts, and SalesAge. I wouldn't rely on their guestimates if I had to, and that's why using these sites as a realiable source will get you banned on some sites. NPD is really the only accurate recording of sales.

@ Arthur,

MS has outsold sony every holiday season this gen, I don't think they have much to worry about this year.
Written by PimpDaddy on 2008/09/06

Xenos: NPD isn't accurate either. They leave out 10% of all retialers. Last time I checked and correct me if I am wrong one of those retailers was Wal-Mart...

Bottom line is nobody knows the true sales numbers but the manufacturers themselves. That being said. We can bet on whatever source you wan't.
Written by Xenos on 2008/09/06

I know nothing is 100% right, but they are the most accurate.

It's actually stupid that I mentioned accuracy though, as long as we use the same measure, hopefully any inaccuracies should be consistent.

I like your idea though, but what happens if both consoles sell a great percentage than last year and neither sell less consoles than the previous year? All 3 have continued to grow in their annual sales and I don't see next year being any different.
Written by Xenos on 2008/09/06

However, now that I think about it, we have to use NPD. This price drop only effects the USA, NPD covers the USA, so they would be the source for our bet.
Written by PimpDaddy on 2008/09/06

Xenos: OK NPD it is. I can have the wife make a spread sheet for the next year...
Written by B1ueBurneR on 2008/09/07

look, 360 will gain sales due to the price cut, but in the end the PS3 will win in the long run, Due to blu-ray and customized HDD options. But really at the end of the day SOny Lost a whole lot of share in the videogaming industry to MS Compared to the PS2 era. END GAME.
Written by PimpDaddy on 2008/09/07

B1ueBurneR: That's what I have been saying all along. As much as I like the 360. I have to be realistic and think that sometime in the next 2 years the PS3 will surpass the 360 in total worldwide sales. You just can't ignore the brand recognition of Sony, and Blu-Ray will be a factor in the coming years.

Sony won the high definition optical media war and at the same time lost the console war to Nintendo and allowed Microsoft to gain a firm foothold in the market.

But I still think the Wii is losing momentum and the arcade 360 is primed to take advantage of it.

If Microsoft was anything more than an afterthought in Japan then they would be comfortably ahead of Sony. But I see the PS3 eventually taking off in Japan and that will be the biggest difference.

Nintendo better take all this profit they are making from the Wii/DS phenomenon and "BRING IT" next generation. I'm talking about NES/FAMICON full on videogame assault. Make nice with 3rd parties. Make a console with the power to compete with Microsoft/Sony. Make sure your damn console can play a movie, construct a real online gaming service, and provide mass storage. But above all else. Keep spreading the first party love!!!!! END RANT.
Written by Xenos on 2008/09/07

Whoa, in two years? lol It's true that the ps3 outsold the 360 in 2007 and will proabably again in 2008, but the lead in sales equates in the thousands and not millions. For Sony to take over the MS for 2nd place, the 360 would have to really decline in sales or the ps3 would have to really jump up in sales.

Go on and quote me on this: when the next gen starts, there will be more 360's sold than ps3s. Beyond that however, I do see the ps3 overtaking the 360 unless MS follows Sony's 10 year life plan.

Like I've been saying though, it won't matter in the end, the install base of both systems will be so close it won't even be worth gloating about.
Written by PimpDaddy on 2008/09/07

Xenos: How bout we bet on this instead. By the middle of 2010 the PS3 will surpass the 360 in worldwide sales. It would take 2 years to confirm a winner. But it would be definitive.

I just honestly see Blu-Ray taking off and once the JRPG's hit the PS3 in Japan that will make all the difference in the world. I want to be wrong. I really do. But Microsoft shot themselves in the foot with the RROD more than anything Sony did right...

It's one thing for Sony to overcome it's high price at launch, late launch, shortages, lack of games in the first year, and idiotic PR.

But nothing is more damaging than a bad reputation for reliability...
Written by Xenos on 2008/09/07

Sure we can bet on that instead, no problem.

I agree that the RRoD was a huge f^ck up, but the only one's who really harp on it now are us gamers and the sony fanboys to use for ammo.

Basically anyone that keeps up with gaming, and isn't a fanboy, knows the the problems have been fixed and those who don't keep up with gaming may not remember the problem if they even knew about it to begin with.

The average consumer can be very ignorant when a low price is involved lol

Also for the record, not backing down from the bet at all, I'm not saying that it's impossible for the ps3 to pass up the 360. Anything seems possible this gen, however given the current sales rate, it's unlikely to happen is all I was trying to say.
Written by B1ueBurneR on 2008/09/07

Be realistic The PS3 is only 5 milli away from catching up to the 360 install base WORLDWIDE
Written by Xenos on 2008/09/07

Yeah I know and I am being realistic. How about you guys be realistic? "Only 5 million"?? It's not like either high end console sells in droves.

If the ps3 outsells the 360 WW by 200,000 a year, than it would take Sony 25 years to make up that 5 million gap. Sony would have to sell 2.5 million MORE units than MS for the next two years in order to catch up, and that's not counting passing them up entirely. That's reaching Wii-like sales numbers for sony's console worldwide, do you really see that happening?

Like I said, it's not like Sony is selling 15 million ps3 a year while the 360 is selling 3 million. Like I said the difference in WW sales are not so big that it's going to change the landscape of where they stand if the sales of both consoles stay consistent.

Of course anything can happen, the ps3 could start selling more than the Wii, or MS could finally find that golden ticket to selling better WW. However I'm not estimating on "what ifs", I'm going by the sales trend of this entire generation.

The sales are close enough WW that they will probably be in the position they are in now for the rest of this gen. At least until the next gen starts, where MS and Sony take it from there is anyone's guess.

It's not like I'm trying to make anything up here.

lol I repeated "like I said" way too may times, sorry
Written by kr0niXz on 2008/09/07

I think MS has the better christmas line-up for 08 (just slightly) and with the price I bet 360 will win this Christmas (not including that stupid Wii console)
Written by madgunde on 2008/09/07

"Please don't try to argue with me on this because you really are wrong. The size of the pie grows based on how much the 3 sell, this would represent the overall video game market growing. Each company's marketshare will grow as their install base grows."


I'm sorry, but you just don't understand what market share means if you think that all competitors in a market can have an increase in their share of the market at the same time. Mathematically impossible.

From Wikipedia: hxxp://en.wikipedia.org/wiki/Market_share

"Market share, in strategic management and marketing, is the percentage or proportion of the total available market or market segment that is being serviced by a company.

It can be expressed as a company's sales revenue (from that market) divided by the total sales revenue available in that market. It can also be expressed as a company's unit sales volume (in a market) divided by the total volume of units sold in that market."

Market share is a percentage. The total market = 100%. It's a pie. No matter how big the market gets, it's always still a pie which equals 100% and the total of each competitor's share of the market = 100%. So, if the Wii has a 47% market share, 360 has 30% and PS3 has 23% (to total 100%) this year, even if next year they all continue to increase their sales and the overall market continues to grow, the market shares of the three will still equal 100% and if any one competitor's market share increases, it HAS to be at the expense of one or both of the others. This is pretty simple business/economics.
Written by Xenos on 2008/09/07

Thanks for saying what I said madgunde. Sorry if I explained it weird, but I never intended to hint that the pie can grow beyond 100%. Doesn't change the fact that you mistook marketshare for the overall pie.

And I also would like to know why MS' marketshare has to be the only one at a constant decline, according to you, where the other two will only see growth?

There comes a point where the market stablizes and we should see shifts in the marketshare instead of a slanted decline of only one company.

Still having a hard time taking those sony fanboy glasses off huh?

When I said the pie is ever growing, I didn't mean in percentage, I was trying to talk about the various install bases that make up the 100%. No matter how much of the market each company holds, their overall install base will increase year over year. Going back and reading it, I can see how it doesn't really make sense, and for that I apologize, I was working while typing that. But what you typed is what I was trying to explain.
Written by kungfurabbit on 2008/09/07

I'm sorry but wii surpassed the 360 very fast on worldwide sales. It's very likely sony will surpass as well, it's just taking a bit longer. Yeah 2 years from now sony will be in 2nd.
Written by arthur56k on 2008/09/08

pimpD, statistically, one can go on and draw a good enough estimate for 10 million from a group of 2000 - 4000, so NPD locking out any retailers is in itself something many wouldnt agree with, but its better than any other survey group has done.

Media craeate does i think 60% and famitsu something like 50 if i remember correctly, VG charts.....the guess is yours.

bottom line is that the margin of error in what NPD does is lower than anything else that is done out there
Written by arthur56k on 2008/09/08

kungfu, Sony is never going to surpass MS if the price is that high, gain, yes, surpass, never in the near forseable future.
Written by madgunde on 2008/09/08


I didn't mistake anything for anything. Overall pie is not really your typical business term. Market share can be of the overall market pie (to use your term), or of a given time period (weekly, monthly, quarterly, annually). I wasn't trying to spin something as bad for MS, I was only bringing it up to warn PimpDaddy that if he's going to make a bet about market share, it's important he makes it clear what timeframe he's talking about, because it can make the difference between him winning or losing the bet. If MS's 360 sales really pick up, their market share for Q4 2008 can go up by 10% over Q3 2008, but their market share of the total install base would still be lower .
Written by Xenos on 2008/09/09

wow @ madgunde.

Yes, I'm sorry you are right, no matter what MS does they will lose marketshare while Sony will continue to soar into the stratosphere.

Thank you for showing me the light, where would GR be without your unbiased insight.

Written by madgunde on 2008/09/09


I'm sorry you think my posts are an anti-MS pro-Sony propaganda piece, rather than an honest attempt to educate you about common business terms and economics. I in no way was trying to say that there's any validity in measuring market share for total install base, or that it's more important than annual, quarterly or weekly unit market share. I just wanted to explain the differences, and why it matters. I was trying to help PimpDaddy determine what is the best way to gauge the market performance of the Wii vs. the 360 for purposes of his bet. You somehow interpreted this as trying to spread an anti-MS message.
Written by Xenos on 2008/09/10

lol @ educating me? lmao

I'll tell you where the anit-MS message came from, this quote right here:

"I suspect the 360's share of the install base is going to continue to decline since they started at 100% and as time goes on, it's going to continue to erode until it approaches the weekly/monthly unit sales market share."
Written by madgunde on 2008/09/10


That's not an anti-MS message, that's just economics. If I sell 100 widgets the first year with zero competition, I have 100% of the total market share. If I sell another 100 widgets in year two, but I now have two competitors who each sell 100 units in the second year, my market share for year two is 33.3% (100 units / 300 units), but my total unit market share for all time is 50% (200 units / 400 units). So lets say in year 3, I sell 150 widgets, but my competitors only sell 100 widgets each. My market share in year 3 is now 42.9% (150 / 350), an increase of nearly 10 points, but my total unit market share for all time is 46.7% (350 / 750), or a decline of 7.1 percentage points. Are you disputing this math or simply claiming that the only reason I point it out was to bash MS, rather than to point out to PimpDaddy why it's important that he makes a distinction when making bet?

Maybe you simply didn't understand what I meant by install base share. Install base is just a simpler way of saying total unit sales for all time.
Written by madgunde on 2008/09/10

Oops, that 7.1 should have been 3.3 percentage points, was looking at the wrong number when I did the math.
Written by Xenos on 2008/09/10

I understand all of that, but there comes a time where the market levels out and MS doesn't have to continue to lose marketshare.

Look at the ps2 last gen, with the introduction of the GC and the xbox, the ps2's marketshare fell from 100% as well. However after the dust settled, they were still able to hold and maintain roughly 50%+ of the market.

The way you make it seem is that MS has no choice but to be at a constant decline, which really isn't the case. The market, at least between the two high end systems, has leveled out and now we will have to wait and see how it plays out for the rest of the gen.

That's all I'm saying
Written by madgunde on 2008/09/12


Obviously you missed this part of my original post:

"I suspect the 360's share of the install base is going to continue to decline since they started at 100% and as time goes on, it's going to continue to erode until it approaches the weekly/monthly unit sales market share." <--that last part about approaching the weekly/monthly unit sales market share would be the part where their overall market share for all unit sales levels out.

I think maybe you reacted to my post before you finished reading it, or misunderstood my point.
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