Further bad press has hit the news today about the 360. MS admitted that all their consoles have the chance of failing.
With the high price point and the bad press I think it will kill the sales trend we have seen so far and even in America the 360 sales will diminish.
That on top of the lack of a price cut will limit the sales of the console throughout the summer.
We will see a short term sales spike with the launch of Halo 3 and then sales will drop down again.
MS is struggling to make a profit this time around and that lends weight to the idea they will respond to Sony's price cuts instead of doing them themselves first.
Overall this is further proof that this stock remains Overvalued by between 1400 - 400 DKP.
There is a great short opportunity here for people, the stock it still overvalued by a good 500DKP by the most generous of estimates by a number of people here on the exchange.
Looks like Sony has some good momentum when only comparing them to MS, they just need to get more marketshare so MS doesn't keep getting exclusives. I believe 360 sales will lag until Halo 3 releases. PS3 should overtake 360 in sales for July & be toe-to-toe with 360 in August.
@welshbloke, if Microsoft just assumed an economic loss of $1.1 billion, why do you expect a significant price drop?
Think about what that would mean for Microsoft. According to your prediction of 60 million units, Microsoft is going to sell 50 million more. If they lower the price on all Xbox 360s by $100 (which I would consider a significant price drop), they are losing $100 x 50 million = $5 billion. That's almost a tenth of Bill Gates' net worth. These are big numbers, and Microsoft is selling products in order to make a profit, not to post higher unit sales than the PS3 or Wii.
Of course they're not going to sell Xbox 360s at their current prices forever, but if they wait until they've sold 20 million, they've earned another $1 billion relative to cutting the price now. I'm not sure how long they'll wait, but they're avoiding losses of about $16 million for every month they push a price cut back. This number will increase quite a bit during the upcoming holiday season (which will be the biggest yet according to Microsoft's press conference).
I cannot imagine anyone at Microsoft deciding that selling their consoles at further loss would be a good idea, especially in light of their announcement last week. For this reason, I think a prediction of 60 million Xbox 360 sales depending on a significant price drop should be revised downward.
It's taken 1 year and 10 months to ship 11 million units to retailers. Sales estimates are between 7-8.5 million for the 360.
I am taking into account an increase in sales after the price drops, however I think the 360 and the PS3 are going to split part of the Market between them because they are so similar.
OK based on todays sales they would be hitting 40 million in 5 years what I am saying is that I do not expect todays sales to remain at the current levels and if discounted properly this unit will shift in mucher higher numbers. Your estimate is based on everything staying the same. It wont.
For my money £199 would be a magic number for the Premium model.
-1
Thank you.
So they posted a profit right before they canned the entire console.
With the whole debacle with the RROD I really don't see them making a profit on the 360 anytime soon either.