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No Xbox One or PS4 price cuts at E3 - Analyst

Any expectation of a price drop from either Sony or Microsoft on their newest consoles should be set aside, this according to Wedbush's Michael Patcher (via GamesIndustry.biz). Analyst Patcher is basically renowned for guessing at business moves in the game industry, and his predications are general laced with derision that concern all companies involved. In this case, he sees the Xbox One and PS4 sticking at their price points. In fact, he sees the $50 cut currently on offer for the Xbox One evaporating before the holidays.

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uth11895d ago

price drops at E3 confirmed now!

zeal0us895d ago (Edited 895d ago )

Well looking at history price cuts usually came after a new variant was introduce or ~2 years after the console(that's getting the price cut) was release. So I wouldn't be surprise if MS and Sony cut their 500gb variant by $25-50 dollars.

Magicite895d ago

I think this time Patch-the-guesser might be right for once.

OB1Biker895d ago

'Analyst Patcher is basically renowned for guessing'
That gave me a good laugh

Crazyglues895d ago (Edited 895d ago )

@ uth11

Yeah I have to agree with that because the last time Patcher was right Blockbuster was still -- "oh wait a minute, scratch that, Patcher has never been right" .....LoL

Don't know what I was thinking.

yellowgerbil895d ago

I think xbox won't but sony will. I'd say at the very least sony will discontinue the 500gb and replace it with a 1tb at 399. but think it is more likely they'll do 500gb for 349 and 399 for a 1tb

uth11894d ago

I doubt they'll discontinue the 500gb model because they just got FCC approval for a slightly revamped 500gb model.

Most likely they will sell the 500gb for a reduced amount.

Crazyglues894d ago (Edited 894d ago )

@ yellowgerbil

You guessed it and that's exactly what they did...

http://l.gamespot.com/1Gp8i...

+ Show (3) more repliesLast reply 894d ago
Ghost_of_Tsushima895d ago

Great news! Price drops incoming.

AngelicIceDiamond895d ago

Lol price drop won't happen if both announce 1TB console.

optimus895d ago

....or a price drop could happen on remaining 500gb consoles and keep 1tb versions at current price.

XanderZane895d ago

I think they will phase out 500GB consoles and make the 1TB the standard. There may be a price cut on the 500GB systems, but once those are gone, we won't see them again.

dcbronco895d ago

Pachter actually might be on to something. The 500gb machines might get a cut to clear inventory. After that they will disappear and the $400 1tb versions will be the norm. We'll get bigger hard drives and game bundles instead of price cuts.

Blame Sony fanboys. If they would have let go of the delusion that Xbox doesn't make money the 360 would cost $179 by now for a Pro. But because of their bubble most see it as completely acceptable that a ten year old console has only had a $100 price cut because most believe it loses money at that price.

I don't blame Microsoft though. I blame uneducated consumers for not making any effort to understand what they are paying for. Though the ability to cut prices might not be as great this generation which is another reason we'll see new consoles by 1919-20. Especially with Nintendo launching a much better machine in the next year or two.

avengers1978895d ago

So you're suggesting that Sony fanboys control what MS prices its merch at... So to prove to Sony Fanboys the 360 makes them money, they keep the price higher than they could sell it for... A company worth billions cares that much.... A company that doesn't actually need to see profit from the 360 at all, and could literally give them away, won't to prove to people that aren't stock holders there making a profit on it..... Is it Apple fanboys that make the surface so expensive then?

Spotie895d ago

Not one bit of what you said made any sense.

How can Pachter be on to something if the 500GB models are gonna receive price cuts?

How would Sony fanboys have forced Microsoft to do anything?

What did these uneducated consumers not understand about what they were paying for?

Since when is Nintendo releasing new hardware within the next two years?

dcbronco895d ago

Wow. Really? Let me break my point down to you in simpler terms. Public perception that Xbox loses money allows Microsoft to continue selling at a decent pace though it is extremely overpriced. Sony was selling the PS2 for $99 five years in. The 360 has the advantage of smaller die sizes and having the two most expensive parts in a console combined into one part.

Let me break that last part down for you. The CPU and GPU are two different parts. If you were building a rig, you would pay a price for each. The same as Microsoft and Sony did in their consoles. But with the Slim, Microsoft combined those two parts into one part. So instead of paying twice for both parts, they paid once and still got both for half the price. Remember how much those two parts cost last generation. About $300 at launch. This generation they cost about $120 because they started with APUs at launch. Which is sorta what the 360 has had for seven years.

Die shrinks. Chips are made on silicon wafers. Think of a circle. Then cut a big square out of it. That's a chip. You pay $100 for that chip done at 90nm. You use it to make one console. Now shrink the die to 65nm. You get 10 chip at 65nm from the same size wafer. And you pay $100. You now make ten consoles for $100. Then you shrink to 45, then 32 and 28. Each time more chips for $100.

Again, normally you do that process for the CPU and GPU. And pay $200 for the two wafers. Microsoft was only paying for one wafer starting with the Slim and was down from 90nm to 45nm. There are a lot of other things that bring the cost down too. So Microsoft has been making a very nice profit on every 360 for some time. And it was selling fine during a lot of those years. So Xbox makes plenty of money.

Gamers often bitch about game price and getting nickeled and dimed. They don't want to pay more despite developers going out of business because cost have gone up. But no one bulks at paying $300 for a console that cost probably $100 to make. And all because they believe it's not a bad price because Microsoft is still losing money on it.

On your Surface comment. Comparing an iPad to Surface with it's i7 or even i5 is a joke. iPad is overpriced. Before Surface, tablets with similar specs would cost you $1300. So Surface relatively cheap.

dcbronco895d ago

Let me help you understand Spotie. A cut to clear inventory isn't a price cut, it's a sale. Word has been going around that Microsoft and Sony APUs are getting a die shrink this summer, that cuts their cost. So you would want to get rid of the older version. It happens every time a new version comes out.

Sony fanboys haven't forced Microsoft to do anything. In fact, they've helped them. As the 360 got cheaper to make the price should have dropped. But they didn't have to because people thought it was still a good deal. And it was, I got plenty of enjoyment from mine. But the 360 became like buying expensive clothes. You think you're paying for something that cost a lot to make. Really you're paying for the perception that you are buying something that cost a lot to make.

The uneducated consumers don't understand what consoles cost to make or the refinements that bring cost down over the course of a generation. I don't understand all of it. But I understand enough that if you look back at some of my previous post before the 8th generation launch you'll see that I predicted these machines would launch breaking even or with a slight profit. That they would most likely use APUs and the APUs would top out at around $120. I thought most likely around $90. I didn't think there would be so much modification. I thought they would go with more power parts over modifications.

I also believe prices won't drop as much this generation. The savings on die shrinks is getting smaller from what I hear. So cost can't be cut there as much as it used to be. Then there is the fact that bundling and hard drives have become acceptable replacements for price cuts. As developers cost go up and more of them die or go to mobile, which kinda means die also, there will be less opportunity for making a royalty. So the old sell the console at a loss/make money on the game business model is sorta dead. That's why Windows 10 is so good for Microsoft because of the added potential of mobile and PC games on Xbox.

Also this generation will be shorter because console like APIs on PC will make console games look less appealing and the added power to do more things will leave console developers unhappy. NVIDIA says their next GPU architecture gives them a ten times power boost. Even half that leaves consoles looking anemic. Plus add high bandwidth memory and DDR4. There is too much coming out and PCs have a console like APIs now. Too big a gap in power. Five or six years for this generation.

Nintendo usually makes a new console after 5 years. Maybe six. 2017 would be about that for Wii U. Everything I said above about PS4 Xbox One. 17 would give Nintendo a two year or more head start with far superior hardware. I think they learned their lesson with the underpowered thing. Developers will come back and I'm sure Itagaki is giving them pointers on specs. I would bet the Devils third is a support for support deal. With APUs they can keep their profit day one on hardware business model. And this year would be the time to announce a console for 2017. It's not like Microsoft and Sony will just drop this generation just four years in. Two years with DDR4, next generation Zen APU and AMDs next generation GPU all with HBM. Nintendo would rule for two years.

But ultimately gamers would benefit because Sony and Microsoft would have to go huge generation 9 to make it cost prohibitive for Nintendo to leapfrog them substantially again. Nintendo could be the dark horse and sneak a win at E3.

greenlantern2814891d ago (Edited 891d ago )

Blame MS for the decisions they make, they haven't dropped the price of the 360 lower because they don't want to. Because they are selling at their current price well enough, and yes MS wants to make as much as possible from 360. Once sales fall far enough the price will drop until they phase it out all together.
I do agree that new consoles will come out much faster, but the last generation was really long. Technology just progress to fast for another 10 year cycle.

dcbronco888d ago

Lantern ultimately you have to blame the consumers for making uneducated choices. The corporation is obligated to shareholders and that means maximizing profits. But when the general public runs out to buy overpriced products they actually are holding back progress.

Had consumers refused the overpriced 360 four years ago Microsoft would have dropped the price. The best way for a corporation to increase profits is with innovation. That would have meant new consoles a few years earlier. The old lose money on the console first model died with the 360 Slim so new machines would have prevented those years of poor sales we went through. Look at the uptick as the generation moves on.

It's ultimately what the market will bare. So it is always up to the consumer to drive value and innovation with demand.

+ Show (3) more repliesLast reply 888d ago
RuleNumber5895d ago

That's actually Pachter for those keeping score at home ;)

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