Posts by Boltzmann
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Oh no, I'm agreeing with Elly 
Anyway, he's right. Nintendo is just trying to make money without effort, bringing up their old titles and charging for them. Oh, what a great concept. Re-releasing stuff is their constant policy.
We're talking about next-gen games, and Nintendo comes around saying that it'll release NES games for the Nintendo Revolution... They should move on, instead of keeping looking back; it shows lack of creativity (or funding, or respect for their consumers). You can't dwell on the past forever (nor releasing the same old titles with a new case forever).
Anyway, he's right. Nintendo is just trying to make money without effort, bringing up their old titles and charging for them. Oh, what a great concept. Re-releasing stuff is their constant policy.
We're talking about next-gen games, and Nintendo comes around saying that it'll release NES games for the Nintendo Revolution... They should move on, instead of keeping looking back; it shows lack of creativity (or funding, or respect for their consumers). You can't dwell on the past forever (nor releasing the same old titles with a new case forever).
I highly doubt that the price difference between the different consoles will be very big. A small gap is what is to be expected.
Besides, we don't really know the contribution margin or the marginal cost (and whenever we have big production lines, marginal cost becomes an important measurement) of each console sold.
We only know that the original X-Box was sold with a loss because M$ said so (and their balance sheets prove it). But by merely inspecting balance sheets you can't really calculate the two values that I mentioned (assuming you can properly read a balance sheet and a cash flow statement in the first place).
Without knowing the CM and MC of a product, you're unable to reliably predict the pricing schemes adopted by the companies. Perhaps Sony will lower the CM of the PS3 in order to increase competitiveness (decreasing gross profits in the short term, but increasing total revenue in the long term due to operating leverage, specially if the MC is low).
I won't speculate on prices until the companies actually announce it. And you must also take into account that prices fluctuate wildly in the short-term (long-term price changes are usually constant), due to situation of the market and the actions of the competitors.
Pulling the $360 figure for the X360 out of a speculation about the price of the PS3 was a specially bad move.
EDIT: I was checking out the financial statements of M$. The financial statements for the 2004 fiscal year can be found here . According to the financial reviews they are still under a heavy operating loss in their Home and Entertainment segment. I don't have the time to check out the income statements right now, but this is convincing evidence that they're losing money for each X-Box sold.
Besides, we don't really know the contribution margin or the marginal cost (and whenever we have big production lines, marginal cost becomes an important measurement) of each console sold.
We only know that the original X-Box was sold with a loss because M$ said so (and their balance sheets prove it). But by merely inspecting balance sheets you can't really calculate the two values that I mentioned (assuming you can properly read a balance sheet and a cash flow statement in the first place).
Without knowing the CM and MC of a product, you're unable to reliably predict the pricing schemes adopted by the companies. Perhaps Sony will lower the CM of the PS3 in order to increase competitiveness (decreasing gross profits in the short term, but increasing total revenue in the long term due to operating leverage, specially if the MC is low).
I won't speculate on prices until the companies actually announce it. And you must also take into account that prices fluctuate wildly in the short-term (long-term price changes are usually constant), due to situation of the market and the actions of the competitors.
Pulling the $360 figure for the X360 out of a speculation about the price of the PS3 was a specially bad move.
EDIT: I was checking out the financial statements of M$. The financial statements for the 2004 fiscal year can be found here . According to the financial reviews they are still under a heavy operating loss in their Home and Entertainment segment. I don't have the time to check out the income statements right now, but this is convincing evidence that they're losing money for each X-Box sold.
On a side note, I like the cautious tone of M$ financial statements that I linked before: "To the extent open source software gains increasing market acceptance, sales of our products may decline, we may have to reduce the prices we charge for our products, and revenue and operating margins may consequently decline.
Anyway, what dpence and Katsuya said just shows how hard it is to forecast pricing schemes when one is ignorant of vital measures such as Marginal Cost and the Contribution Margin (and even with these values, forecasting is still subject to significant uncertainties, due to unknown factors in the business plan or strategic planning).
Anyway, what dpence and Katsuya said just shows how hard it is to forecast pricing schemes when one is ignorant of vital measures such as Marginal Cost and the Contribution Margin (and even with these values, forecasting is still subject to significant uncertainties, due to unknown factors in the business plan or strategic planning).
1 - 4 of 92 Posts
