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Your next gen price predictions


Alex W.
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16 minutes ago, Alex W. said:

You can’t just keep saying installed base and expect me to get what you’re trying to say about it.

 

Long term? Yes, in three years when the PS4 and Xbox One are discontinued, all that’s going to matter is how many PS5 and Series X consoles are out there. But between here and there, Sony are in a weaker position in terms of actually selling games because the install base for many of their upcoming titles - and third parties’ software - is currently zero, not 45 million.

 

Microsoft can play a longer, smarter game.

 

I think it is more important to get as many customers as possible onto the new consoles as quickly as possible than selling individual titles on existing hardware. There are various reasons for this, not least momentum, but also many people are prepared to buy a system this year, if one is significantly more attractive than another then it's quite possible that a customer will stay with that brand for the duration of the generation. Extrapolate those  two things across millions of people and the money involved dwarfs the cost of not selling a few games.

 

The long game IS selling the hardware as cheaply as possible, not sitting back and letting your competitor become the standard and losing some of your customers into the bargain.

 

I understand that Sony can't  sell their PS5 titles anywhere else. Microsoft can sell their titles. The revenue  from that will not be significant enough to offset giving the competition a head start. 

 

I'm genuinely sorry that I hadn't expressed it clearly enough, I honestly thought you understood what I was saying and were trying to provoke me. I couldn't understand  why you just kept saying the same thing. 

 

Edit: I think all this stuff about multiple sku's is clouding things. Microsoft are talking up the hardware that is most important to them. They haven't even formally confirmed lockheart. 

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Edit @Alex W. Brand loyalty? I know many guys I work with have never owned an Xbox but have bought every Playstation released (these arent hardcore gamer types either). Playstation has the advantage of being a massive brand with a lot of 90's nostalgia and associated memories behind it, easily appeals to the more casual audience.

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PlayStation 5 Lump - £449

Playstation 5 Digital - £399

Xbox series X - £449

Xbox series S (Lockhart) - £349

 

...both Sony & MS have in the past taken massive cost hits on getting their machines at a competitive price, and they’re not going to go over those prices ^ 

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5 minutes ago, Alex W. said:

That’s exactly my point. Microsoft don’t need to race to the however-many-million units sold that are required to justify a publisher committing to a major release on the platform. They’ve got One X. They’ve got Lockhart on the way. They can afford to be strategic, not tactical.

 

Series X is probably going to be surprisingly inexpensive and surprisingly easy for them to make at volume. It’s a natural evolution of everything they’ve done in One X. But if you don’t want to spend however much that is, Microsoft have an entire range of consoles with the same games library and similar features.
 

Now, could Microsoft both cut margins and exploit their current range of consoles at the same time, and just go all out? Absolutely. But I don’t think they need to. They have deep pockets but they’ve also got the rare commodity of breathing room.

 

This is all true, as far as it goes, but assumes that the next-gen is just this gen plus shinies. If that's true, then you'd be right it seems like an astute plan. If Sony find ways to leverage the next-gen to make new/better games above the graphics, it falls apart very quickly. There's the other half of the gamble. Yes Sony probably need people to want to upgrade, but maybe they have a promise for them to want to do so. I don't know if we saw a huge list of reasons to do so in the recent showcase.

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1 hour ago, Dudley said:

It being cheaper before tax in the UK than US would be a fairly huge and unlikely story.

Yup maybe parity $499/£499 & $499/£449. Obvs PS4 was $399/£349 but the exchange rate is somewhat changed since then.

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I see articles all the time on DF etc talking about manufacturing costs and BOM costs and its all bollocks. It never takes into account the true cost of manufacture, and the massive effect economies of scale have.

 

If I specced up a PC to a manufacturer and it was going to cost me £800 in materials, and then I said I wanted to build 50 million of them over 5 years, I would get it for £300 from day one. I would then need to add on around 30% to actually build it.

 

I dont think MS or Sony are going to sell at a loss. I think they might sell at cost, or a very low profit, and then they will value engineer (i.e. slim version etc) that take out material costs to increase profitablity.

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27 minutes ago, Wahwah* said:

 

I think it is more important to get as many customers as possible onto the new consoles as quickly as possible than selling individual titles on existing hardware. There are various reasons for this, not least momentum, but also many people are prepared to buy a system this year, if one is significantly more attractive than another then it's quite possible that a customer will stay with that brand for the duration of the generation. Extrapolate those  two things across millions of people and the money involved dwarfs the cost of not selling a few games.

 

The long game IS selling the hardware as cheaply as possible, not sitting back and letting your competitor become the standard and losing some of your customers into the bargain.

 

I understand that Sony can't  sell their PS5 titles anywhere else. Microsoft can sell their titles. The revenue  from that will not be significant enough to offset giving the competition a head start. 

 

I'm genuinely sorry that I hadn't expressed it clearly enough, I honestly thought you understood what I was saying and were trying to provoke me. I couldn't understand  why you just kept saying the same thing. 

 

Edit: I think all this stuff about multiple sku's is clouding things. Microsoft are talking up the hardware that is most important to them. They haven't even formally confirmed lockheart. 


I think what’s happened is that you’ve pointed out something so fundamental to the problem that I have failed to even recognise it. Which would not be a first.  :lol: When push comes to shove, “sell as many as you can as expensively as you can get away with” is probably going to override whatever subtle ideas about the Xbox ecosystem I’m trying to slap over the top of it.

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I think Sony will announce in the £499 range for the disc edition and £399 for the digital edition, which will be heftily subsidised and not sold in retail game shops. Microsoft will announce the same pricing but sweeten the deal with a year of free digital content, both games and with Netflix/ HBO tie-up and make a big deal about how you're getting more grunt and a year of 4K entertainment out of the box.

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1 hour ago, PeteBrant said:

and then they will value engineer (i.e. slim version etc) that take out material costs to increase profitablity.

 

I'm wondering what scope there will be for this. Node shrinks have been the usual way to do this, but much smaller than 7nm seems a very very long way away.

SSD prices will drop, but I'm less sure about heat and power consumption - and most of the size of these things is based around that.

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13 minutes ago, footle said:

 

I'm wondering what scope there will be for this. Node shrinks have been the usual way to do this, but much smaller than 7nm seems a very very long way away.

SSD prices will drop, but I'm less sure about heat and power consumption - and most of the size of these things is based around that.

There'll be stuff in the BOM you can do eventually ; redue the PCB size, that will save money, change of material, reduce the overall size , improve cooling so less expensive materials (or less of them), change of various electronic components, it all adds up .

 

Even if you gain only 3% on profit, 3% on 10's of million units that cost hundreds of pounds  is a lot of money. 

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21 minutes ago, Wahwah* said:

Are they using custom SSDs or are they off the shelf parts? If the former, less chance of that. 

 

They’re going to be certifying third party SSDs that you can use as expansion so I guess the one in there can’t be too unusual. I think the SSD interface on the console is where a lot of the smart stuff happens.

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Given the fact Sony keeps harping on about "value" rather than "price", I would guess that it's more than we expect. I'm sure they're keen to avoid the $599 price point though for obvious reasons:

 

PS5: £499 (diskless) / £549 (full)

XSX: £499

 

It sounds like Microsoft have already agreed on an aggressive price they can achieve with Satya's agreement.  I don't think they'll go too crazy though hence the £499. I also don't think they want to go first so they can change it accordingly based on what Sony is doing.  I think it's likely that both companies will take a loss but look to make that up with services etc.

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1 hour ago, tronied said:

Given the fact Sony keeps harping on about "value" rather than "price", I would guess that it's more than we expect. 

 

PS5: £499 (diskless) / £549 (full)

 

Yeah, I think that Microsoft have been laying the foundation for high pricing too, it's felt like everyone has been saying "that's not going to be cheap" for a really long time. I wonder if there's some psychology at work, if they can get the consoles out for £500, will everyone breathe a sigh of relief at the reasonable pricing? If they're £600, will everyone accept it as they were prepared? 

 

I personally think £500 sounds reasonable now but £600 is crazy, ridiculous, no chance. 

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XSX £499 / $499

PS5 Digital £499 / $499

PS5 Lump £549 / $549

 

I think (with no evidence) that the existence of the PS5 digital edition is purely to have something the same price as Microsoft that breaks the 500 dollar mark, and Sony will be taking a loss on both editions that they hope to make up by pushing the digital edition hard. 
 

If Lockhart is an actual thing which can play XSX games but only at 1080p and also has an SSD, I think that will be £399 / $399. 
 

I reckon dollar / pound pricing equity is going to be a thing from now on. We’re already seeing Apple price things higher in pounds than dollars so the precedent is set, and I think both companies will focus on a better price for the US market. 
 

I also hope I am completely wrong. 

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8 minutes ago, Gigawatt said:

 

I reckon dollar / pound pricing equity is going to be a thing from now on. We’re already seeing Apple price things higher in pounds than dollars so the precedent is set, and I think both companies will focus on a better price for the US market. 
 

I also hope I am completely wrong. 

 

US prices don’t include VAT (sales tax varies from state to state so easier to price without). Once you factor in that the U.K. price includes 20% VAT there’s not much in it given that GBPUSD is currently at 1.25.

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Copied all that but if you remember when PS4 launched it was £349 / $399, which was actually not that bad for the UK if you assume sales tax of around 8% and an exchange rate of about 1.6
 

I just think now the exchange rate is a lot worse and the US market is so much bigger Sony won’t have any bones about advertising the prices as the same. 

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27 minutes ago, gossi the dog said:

 

US prices don’t include VAT (sales tax varies from state to state so easier to price without). Once you factor in that the U.K. price includes 20% VAT there’s not much in it given that GBPUSD is currently at 1.25.

 

Yeah that was my point to Pete, if the exchange rate is 1.20, £=$ is the same price.  And they set based on medium term predictions of course, so you have to believe there isn't an imminent trauma for the UK economy that might affect things.

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Expect A LOT of pricing and instalment plans from the various credit companies in stores like Game. They seem to be everywhere at the moment and paying 4 'instalments' over 4 months or whatever is going to be very appealing on any of these machines for a lot of people. 

 

I'll have a quick go...

 

PS5 Lumpy £499

PS5 Less Lumpy £439

Xbox Series X £449

Lockheart (Assuming diskless 1080p machine in the new style) £249 - I think they will go in super low with this one. It will almost be like an Xbox One X Pro and needs to be the hop on entry point for 'next gen' and gamepass. 

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2 minutes ago, smac said:

And the games? A jump from 50 quid? Will the dl-only versions ever drop in price? Will we see a new indie boom, or even the return of the AA game?

 

Every gen has seen a creep towards digital. This gens version of game X shifts 20% more digital copies than last time for instance. I would expect the same this time so they will make more money as I don't think digital games are going to be be made cheaper in their first months. I predict boxed games on a shelf will largely stay the same with more attempts to get you to move away from the pre-owned market by further promoting games as a service and of course the likes of gamepass. 

 

I think Sony will definitely reveal a rebranded and refocussed PS Now service. It will take a while for them to rival Gamepass and I think it will take them at least a year to re-launch it but they will once they know PS5's are flying off the shelves. 

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13 minutes ago, smac said:

 Will we see a new indie boom, or even the return of the AA game?

Indies have become the home of AA games. Stuff like Cuphead, The Banner Saga, The Witness, Slay the Spire and Superhot are all what I would call AA games. 

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16 minutes ago, smac said:

And the games? A jump from 50 quid? Will the dl-only versions ever drop in price? Will we see a new indie boom, or even the return of the AA game?

I don't see significant changes to current pricing on either end.

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