From
http://www.edge-online.com/features/console-price-cuts-the-evidence?page=0,0
How did price drops happen last generation? Both the GameCube and the Xbox had quick price drops after six months (from $200 to $150 and $300 to $200 respectively) and the PlayStation 2 lasted 19 months before it dropped from $300 to $200. You might recall that all three of those price drops came in the same month: May 2002.
It is also worth noting that by the end of 3.5 years on the market all three consoles had settled in at 50% of their launch prices.
A PlayStation 3 or Wii price drop in the near term would align nicely with the pricing of the Xbox and GameCube in 2002. However,
should Sony opt to reduce the price of the PlayStation 3, it will be likely be in the 16-20% range, not the 25-33% range that Microsoft and Nintendo chose for their last generation consoles.
However, the available NPD data from the last generation actually suggests that most consumers purchased their new consoles at or well below $200. That is, to the extent that a console's mass-market appeal is tied to price, the magic price is far below the $300 mark, closer to $200.
Only 24% of all PlayStation 2 systems in North America sold at $300. The remaining 76% sold for $200 or less with $150 being the most popular price by a small margin. Certainly time plays a factor there -- the $150 system price was in place for longer than any other -- but Sony would likely not have kept that price if it weren't selling systems as a rate they found acceptable.
A mere
13% of all Xboxes were sold at the highest price, $300, while over 42% went for $150. A closer look at the data shows that the drop from $300 to $200 did spur sales, but
the drop to $180 hardly changed the number of systems bought per month. By comparison, the drop to $150 pushed Xbox sales above 200,000 systems per month and kept them there until May 2005, the month that the Xbox 360 was announced.
The GameCube is a bit of an odd man out, since it started at $200 and only went down from there. It also sold the fewest systems, which demonstrates that
being below $200 isn't the sole determining factor to average consumers. While most GameCubes were sold at the $100 level, it is important to note that the rate at which the system sold each month was not significantly improved in the long term by that price drop. The GameCube stayed at that price for over 3.5 years, which essentially explains why 60% of those systems were sold at that price.
Certainly we can use history as a guide, but there are limits to its use for prognostication. The price drops this generation may happen in ways entirely different from what has been suggested above.
Maybe the $300 console this generation will be what the $200 console was last generation. Maybe Microsoft will forge ahead with its current price structure until after Halo 3 has come and gone. Maybe Sony will bless the PlayStation 3 with a 33% price drop sometime this year. And maybe Nintendo will give the Wii a small price drop by removing Wii Sports from the package.
Those could happen, but
don't bet on it.
Another place for reference
http://vgsales.wikia.com/wiki/Price_cuts
k
with thousands of titles available at GS for dirt cheap prices, and the sheer amount of great games put out makes it all worthwhile
