PS3 and 360 Price Cuts, Before Holidays End

A lot of people have purchased the Xbox 360 and a growing number have had new interests in the PlayStation 3. The summer time is winding to an end and fall will bring us a new host of video games and reasons to keep playing our current generation consoles. Many analysts and industry leaders believe the 360 and PlayStation 3 will undergo a USD $50.00 price cut before the Holidays begin.

With holiday madness comes momentum and sales, a USD $50.00 price cut would help bring new momentum to both consoles, especially with Nintendo lapping them in sales. Nobody has considered the direction of the Wii as it doesn’t need to be priced competitively given this is going to be the third year it’s impossible to find in stores.

Do the consoles really need a price cut? It’s hard to argue the PlayStation 3‘s dire need for cutting in price given its already outrageous costs for a console with the least amount of desired titles. The Xbox 360, for most, has the best lineup of titles with a strong fall series of games. The Wii… well, titles don’t really matter just yet because people still buy the console upon sight. The PlayStation 3 is showing off some impressive graphics for this fall and early next year, it may almost be time to invest in the product.

The fall games will keep hardcore gamers buying titles but it will do little to inspire new console sales. If GTA IV, Halo 3, Gears of War and Metal Gear Solid 4 couldn’t drag a gamer to buy, what fall titles will do so this year? Probably very few.

It’s time for the big console vendors to broaden their audience by opening the console to a demographic of gamers that just can’t afford the higher graphic consoles. No, USD $50.00 won’t bring in everyone but it may inspire those on the fringe of consideration to change their minds. With their new consoles in hand they can use their USD $50.00 savings to purchase a new holiday release title.

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3 Reasons Publishers Desire Us to Keep Old Games3 Reasons Publishers Desire Us to Keep Old Games

When we invest in a new video game we want to feel satisfied by the content supplied in the game, we want to know we’re getting our moneys worth in the investment. Publishers, on the other hand, want us to keep our old games so they stay out of the used market. A publisher does not make a dime on used game sales. Their primary weapon to stop game sales? Downloadable Content (DLC).

1. Publishers Spend Lots on Marketing

A great example being GTA IV, hardcore gamers have a short attention span and live on hype more than physical games. Today, games live in press releases, demos, cinematic and live gameplay footage at conferences and on the web. Then, a game hits the shelves and sells millions of copies for a week or two before it’s forgotten. Publishers have marketed their game well, spent thousands on conference booths, streaming video bandwidth and rushing game demos through development and testing cycles early to get eyes on their titles.

Let’s face it, gamers that scrambled to buy Grant Theft Auto IV have moved onto the next big title or have decided to go outside for some fresh air (probably the former). Hardcore gamers consumes games like candy, sells them off for store credit and works towards their next purchase.

2. Publishers Want Loyalty

DLC breaths new life into old games, making them remain valuable for months after the hype and excitement has died. We’re now spending USD $60.00 for some of these new “current generation” game titles for a few days or weeks of excitement. Free downloadable content brings new reasons to play our “old stale” games and allows us to feel comfortable about our 60 bucks spent on a title.

Rainbow Six Vegas 2 is receiving a new “Fan Pack” for gamers to re-energize themselves about the “old” sequel to Rainbox Six Vegas. A game released in March is considered old by gamers, probably rarely played on Xbox Live anymore and needs something to keep the fans interested. This helps build loyalty to your product so the next franchise title which is released has a better chance of being purchased by your fan base because they can look forward to additional free content in the future.

3. Publishers Hate Used Games

Publishers are helping stick those games in the hands of the gamers for a longer period of time by supplying free add-on packs. Why would you re-sell your precious title back to the store when you could hold it and wait for potential DLC?

Publishers receive no revenue from the resale of a video game so it’s in their best interest to keep it out of the used markets. If there is a chance your beloved game will receive new features, at no cost to you, wouldn’t you hold off from selling it to see what’s coming?

Once a gamer has sold their title to a retail chain for pennies they’re unlikely to re-buy the title with the typical 80% markup when DLC arrives. They may opt to borrow a friends copy or rent the title rather than re-purchase it; neither fair well for the publisher in terms of revenue.

Games are expensive. Consumers must be wise to the best value in their video game titles and publishers want you to choose them for your gaming entertainment. Competition is high, profit margins are low and the market is all about sales volume. Publishers want repeat customers, people who feel their games are valuable before and after the purchase and are willing to share their loyalties with others.

Do you collect old console games, or do you sell them off to game stores and/or eBay? Would you consider holding off a sale if there was a great chance of new downloadable content?

PlayStation 3: Not About Quantity, About ProfitabilityPlayStation 3: Not About Quantity, About Profitability

The Xbox 360 price drop rumors flow like water and it’s all but officially been announced at this point. What about PlayStation 3 and their price? No.

Nobuyuki Oneda, the Sony’s chief financial officer said, “our plan is not to reduce the price. Our strategy is not to sell more quantity for PS3 but to concentrate on profitability.” (gamespot) This makes complete sense coming from their chief financial officer, as their motivation is to make money, not lose it.

The question remains, how will they actually make money if they’re no longer in the race for competitive market prices? Considering game licensing must Net them some amount of profit Sony’s idea seems to be the exact opposite of their original PlayStation method: saturate the market and sell them all games.

So far we’ve seen very few “need to have” games for the PlayStation 3 console while Xbox 360 continues to build a substantial library and Wii continues to break sales records for apparently no reason. When a game publisher has to decide on a platform to launch a new game, why would they choose the one that doesn’t care to be competitively priced in the market? The one that doesn’t care about quantity of sales?

Sony intends to reverse the entire razor blade philosophy where one sells a cheap razor and charges users for the blades over and over again. Their take on this concept is to sell really expensive razors and put out small half-quality blades. Is that a good market strategy at this point?