Shungo's Mythbuster #4: Price Advantage

[QUOTE="El_Fanboy"]

One scenario where your theory doesn't work, is when there is an uninformed parent making the purchase. If the parent is getting a console for their kids, they will probably buy the Wii solely on the price difference.

 

shungokustasu

This was not meant for the child who can not pay for his own product. Children don't make there own choices

Exactly, if children dont make their own choices, then it is the ignorant parents who buy the console. If i knew nothing about video games, I would most definitely buy the 300 dollar console for my kid. That is a price advantage right there. 

[QUOTE="MikeE21286"][QUOTE="bionicle_lover"][QUOTE="MikeE21286"][QUOTE="goblaa"][QUOTE="MikeE21286"][QUOTE="goblaa"][QUOTE="MikeE21286"]

OK...........

So you're saying it's preference and not price...

Well riddle me this.......

IF the PS3, 360, and Wii cost $250 each.....What would they buy then

[QUOTE/]

And what would be the chances of the PS3 or 360 being $250 and having no hardware changes? 0%.

At $250, the PS3 and 360 lose a lot of what makes them appealing.

bionicle_lover

That's not the argument TC is posing though. He says its all about preference and not price....therefore meaning people would prefer Wii over PS3/360 (based on current sales). Well this is not entirely true. If you set the prices equal you would see that ps3/360 would sell more. So to say price is not invovled is wrong. To do this comparsion you wouldn't be changing anything but price.

He's saying that if two products are priced the same, the better one has the advantage. Problem is, comparing the PS3/360/Wii as all $250 with no changes is simply an impossible hypothetical. So how is the comparison of any use?

Because by taking price out of the equation (hence selling them for the same price of $250....hell, "sell" them for free and ask a consumer which one they would want out of the 3) you are able to truly measure the preferrence.

too unrealistic so there really is not point to this hypothetical situation. if this were so, why not just make the wii equally as powerful as the 360 or ps3 since they're all going to be the same price?

Why would we do that. We are trying to measure the preferrence of PS3 , 360 and Wii in their current state.....

but at such low prices? the basis of this hypothetical question should therefore be, which console would you get for free but are not allowed to resell? then, it would be testing which product people want. 

Correct, the fact that youl could not re-sell the system would be a stipulation.

[QUOTE="bionicle_lover"][QUOTE="MikeE21286"][QUOTE="bionicle_lover"][QUOTE="MikeE21286"][QUOTE="goblaa"][QUOTE="MikeE21286"][QUOTE="goblaa"][QUOTE="MikeE21286"]

OK...........

So you're saying it's preference and not price...

Well riddle me this.......

IF the PS3, 360, and Wii cost $250 each.....What would they buy then

[QUOTE/]

And what would be the chances of the PS3 or 360 being $250 and having no hardware changes? 0%.

At $250, the PS3 and 360 lose a lot of what makes them appealing.

MikeE21286

That's not the argument TC is posing though. He says its all about preference and not price....therefore meaning people would prefer Wii over PS3/360 (based on current sales). Well this is not entirely true. If you set the prices equal you would see that ps3/360 would sell more. So to say price is not invovled is wrong. To do this comparsion you wouldn't be changing anything but price.

He's saying that if two products are priced the same, the better one has the advantage. Problem is, comparing the PS3/360/Wii as all $250 with no changes is simply an impossible hypothetical. So how is the comparison of any use?

Because by taking price out of the equation (hence selling them for the same price of $250....hell, "sell" them for free and ask a consumer which one they would want out of the 3) you are able to truly measure the preferrence.

too unrealistic so there really is not point to this hypothetical situation. if this were so, why not just make the wii equally as powerful as the 360 or ps3 since they're all going to be the same price?

Why would we do that. We are trying to measure the preferrence of PS3 , 360 and Wii in their current state.....

but at such low prices? the basis of this hypothetical question should therefore be, which console would you get for free but are not allowed to resell? then, it would be testing which product people want.

Correct, the fact that youl could not re-sell the system would be a stipulation.

im glad to see some intellectual conversations and arguements in here with big words. something rare in system wars. aren't you? i've actually only participated thoroughly in perhaps two other threads that actually had some logical debating. :P 

[QUOTE="MikeE21286"][QUOTE="bionicle_lover"][QUOTE="MikeE21286"][QUOTE="bionicle_lover"][QUOTE="MikeE21286"][QUOTE="goblaa"][QUOTE="MikeE21286"][QUOTE="goblaa"][QUOTE="MikeE21286"]

OK...........

So you're saying it's preference and not price...

Well riddle me this.......

IF the PS3, 360, and Wii cost $250 each.....What would they buy then

[QUOTE/]

And what would be the chances of the PS3 or 360 being $250 and having no hardware changes? 0%.

At $250, the PS3 and 360 lose a lot of what makes them appealing.

bionicle_lover

That's not the argument TC is posing though. He says its all about preference and not price....therefore meaning people would prefer Wii over PS3/360 (based on current sales). Well this is not entirely true. If you set the prices equal you would see that ps3/360 would sell more. So to say price is not invovled is wrong. To do this comparsion you wouldn't be changing anything but price.

He's saying that if two products are priced the same, the better one has the advantage. Problem is, comparing the PS3/360/Wii as all $250 with no changes is simply an impossible hypothetical. So how is the comparison of any use?

Because by taking price out of the equation (hence selling them for the same price of $250....hell, "sell" them for free and ask a consumer which one they would want out of the 3) you are able to truly measure the preferrence.

too unrealistic so there really is not point to this hypothetical situation. if this were so, why not just make the wii equally as powerful as the 360 or ps3 since they're all going to be the same price?

Why would we do that. We are trying to measure the preferrence of PS3 , 360 and Wii in their current state.....

but at such low prices? the basis of this hypothetical question should therefore be, which console would you get for free but are not allowed to resell? then, it would be testing which product people want.

Correct, the fact that youl could not re-sell the system would be a stipulation.

im glad to see some intellectual conversations and arguements in here with big words. something rare in system wars. aren't you? i've actually only participated thoroughly in perhaps two other threads that actually had some logical debating. :P 

Agreed.  Mostly people blindy spin words to cater to the point which they want to get across while turning a blind eye to the real meat and potatoes of the debate.

Agreed. Mostly people blindy spin words to cater to the point which they want to get across while turning a blind eye to the real meat and potatoes of the debate.

MikeE21286

Well, it would be nice if you guys didn't butcher my thread with long chain quotes. 

First of all, I must say that price advantage only exist when two products are exactly the same. Example, Breyers' ice cream tastes the same as Eddy's ice cream, so the price advantage will decide which one to buy. However, most products differ from brand to brand especially in the electronic industry.

shungokustasu

a ha! you live in the east coast! i determined this by noting you have eddy's ice cream where you live, we have the same brand with a different name....its called dreyers here...instead of eddys. 

[QUOTE="shungokustasu"]

First of all, I must say that price advantage only exist when two products are exactly the same. Example, Breyers' ice cream tastes the same as Eddy's ice cream, so the price advantage will decide which one to buy. However, most products differ from brand to brand especially in the electronic industry.

snakeofsolid

a ha! you live in the east coast! i determined this by noting you have eddy's ice cream where you live, we have the same brand with a different name....its called dreyers here...instead of eddys.

lol. Don't stalk me or my girlfriend, please. 

[QUOTE="MikeE21286"]

Agreed. Mostly people blindy spin words to cater to the point which they want to get across while turning a blind eye to the real meat and potatoes of the debate.

shungokustasu

Well, it would be nice if you guys didn't butcher my thread with long chain quotes.

Sowwy :D 

Lower Priced Product (Similar / Identical products) = Better Sales

Lower Priced Product (Different products) = Depend on perceived value and the comparison of PV against the actual price.

 You forgot the bold part. People don't buy Wii's cause they can afford them or can't afford the competition. They buy it cause they think its worth their money. The perceived value of the Wii is currently even bigger to some than its actual retail price (proven by Ebay Scalpers). So what's my point? The lower you are priced the more likely the consumer's perceived value of your product is higher / the same as your price point. See! There's the price adventage.

Sowwy :D

MikeE21286

ya. sorry :P woops i think im doing it again. i'll just cut that down. but you have to admit, unreasonable stuff is entertaining to watch and argue against cause you know you can't win, but it's just so interesting with what they can come up with. i'll admit i'm a sheep but not a blind one, at least not figuratively, literally, i probably am. dang gameboy COLOR! and gene pool!

Price is a factor in gaming since the price differences are much greater.  Most people can splurge on cereal and get Boo Berry occasionally, but $250 and $600 is a big difference.

And Turkey Hill pwns Breyer's and Edy's.

I like the analogy, but I dont think cereal quite fit, because unlike game consoles, your system doesnt have a certian preciseness. What I mean by this is I like this taste, yet this box has a variety of flavors (games) but really that  box only holds on flavor and system doesn't. I may buy this system but I dont have to get all of these "flavors/games". You can dislike a precise taste but you cannot dislike every taste of another food product company (or whatever). I like this game and this but I will avoid this game and this one.

[QUOTE="goblaa"][QUOTE="MikeE21286"]

OK...........

So you're saying it's preference and not price...

Well riddle me this.......

IF the PS3, 360, and Wii cost $250 each.....What would they buy then

[QUOTE/]

And what would be the chances of the PS3 or 360 being $250 and having no hardware changes? 0%.

At $250, the PS3 and 360 lose a lot of what makes them appealing.

MikeE21286

That's not the argument TC is posing though. He says its all about preference and not price....therefore meaning people would prefer Wii over PS3/360 (based on current sales). Well this is not entirely true. If you set the prices equal you would see that ps3/360 would sell more. So to say price is not invovled is wrong. To do this comparsion you wouldn't be changing anything but price.

Im not completely sure thats true. After all I dont think you'd be seeing the ps3/xbox360 on Conan Obrien, The colbert report, ellen, and many many other talk shows.  Somehting about the Wii stroke a cord. I mean the DS was almost the same yet psp was much closer in costs...

And to the unknowing consumer a core is only 50 dollars more. cmon. Don't donwplay the Wiis success by saying ps3 and 360 would sell the same b/c 360 almost is and its not. Its not as popular as the Wii either.

 Price really has little to do with it in this situation. look at how popular the Ipod is and its tons more expensive than all the other portable music players out there. If the product delivers something new and refreshing or simply something that hasnt been done before than it will sell no matter the price. 

Expensive Ipod=Cheap Wii

No matter the costs its about the product 9 times out of 10. 

First of all, I must say that price advantage only exist when two products are exactly the same.shungokustasu

However, the price difference is not irrelevant. One dramatic example of this is the PS3. Not so much an advantage, but a disadvantage here. I know I speak for myself and many people I know when I say I want a PS3. However, at $600, I'm not buying one. I want a 360, but I don't want to pay $400 for one. I'm getting one this summer, and only because I'm getting it from a friend who's buying an Elite. I want a Wii. $250? I bought it at launch. That price isn't really a problem.
The point in all this? Price, though it may not drive consumers from one console to another, drives consumers away from buying consoles if the price is too high. This results in lower sales and lower attach rates, which drives away developer. And that's where the major impact on consumer decisions comes: software that appeals to the consumer.

So while price advantage may not have a direct impact in the event of product differentiation, it does, in such a case as this, have an indirect impact which should not be ignored.

All I got to say is: WHAT?

Followed by a laugh face. 

[QUOTE="bionicle_lover"]well, lets say someone only has a limited amount of money so he can only get the cheaper one. there's the price advantage. Even if i wanted a ps3, i would have still gotten the wii cause i could have had the wii with 5 games instead of a ps3 with none. a lower end ps3 at that.shungokustasu

But your choice was the Wii with 5 games as oppose to a PS3. Your preferred choice.

Doesn't matter.  I perfer to have a 5000 dollar Sony TV, or a BMW.  But I instead buy a 2000 dollar Samsung TV or a Honda.   

My desires do not aid the company of my preference.  My wallet does.  So whoever get's my money, get's the benefit.  Guess why I went with the $2000 TV?  It offered a good enough value for the money(Bang for the buck)  

I can't afford a BMW, but the Honda is a good car, and a good price.  

Your logic is flawed.  Give up before you can't climb out of that hole your digging. 

Shungo...I see what you are getting at but the fact is, Console Wars is a bit more complex than choosing cereal. There are a lot of hidden variables (games, accessories, features).SergeantSnitch

Some cereals come with marshmellows....That's a different feature/variable....

If only you could buy bags of the little marshmellows and put them on any cereal....I bet Post has some exclusive deal with the marshmellow company to keep it away from GM and Kellogs...bastards. 

man [QUOTE="MikeE21286"][QUOTE="goblaa"][QUOTE="MikeE21286"]

OK...........

So you're saying it's preference and not price...

Well riddle me this.......

IF the PS3, 360, and Wii cost $250 each.....What would they buy then

[QUOTE/]

And what would be the chances of the PS3 or 360 being $250 and having no hardware changes? 0%.

At $250, the PS3 and 360 lose a lot of what makes them appealing.

Japanese_Monk

That's not the argument TC is posing though. He says its all about preference and not price....therefore meaning people would prefer Wii over PS3/360 (based on current sales). Well this is not entirely true. If you set the prices equal you would see that ps3/360 would sell more. So to say price is not invovled is wrong. To do this comparsion you wouldn't be changing anything but price.

Im not completely sure thats true. After all I dont think you'd be seeing the ps3/xbox360 on Conan Obrien, The colbert report, ellen, and many many other talk shows. Somehting about the Wii stroke a cord. I mean the DS was almost the same yet psp was much closer in costs...

And to the unknowing consumer a core is only 50 dollars more. cmon. Don't donwplay the Wiis success by saying ps3 and 360 would sell the same b/c 360 almost is and its not. Its not as popular as the Wii either.

Price really has little to do with it in this situation. look at how popular the Ipod is and its tons more expensive than all the other portable music players out there. If the product delivers something new and refreshing or simply something that hasnt been done before than it will sell no matter the price.

Expensive Ipod=Cheap Wii

No matter the costs its about the product 9 times out of 10.

The Ipod doesn't really offer anything new and refreshing.  Infact it's usually behind the rest of the MP3 players on the market.  It simply is a fashion trend that took hold, had false demand that was well played, and took so much of the market that it gained an invaluable amount of accessories for it. Where is it's real advantage lies now.

Are you saying the Wii is a fashion trend?  It's cool to have and say, "Hey, wanna play with my wii?" 

Cost matters plenty, there are other factors as well. Most people don't get what they truly want or need, because it's too expensive.

[QUOTE="AfterShafter"]So because products are not identical, there is no such thing as a price advantage? Please... I think what you were trying to say was "Personal preference can overcome price advantage." Costing $350 less is a price advantage, whatever kind of retarded sophistry you want to spin on it.shungokustasu

No...price "advantage" does not exist when deciding on a product. I should say it doesn't matter at all.

To quote Billy Ellio. "Jesus Christ Shunko, your a disgrace to your fanboy keyboard, your cow kindred, and this forum"

Tell that to the NPD sales figures. Beaten by the all mighty GBA.  

I believe this is true to an extent.  i knew going into this generation that i would want a Wii and a ps3, regardless of price.  The ps3 was announced as $600, and i still got it, along with the Wii (launch baby!).  I now own both....why? Because that's what i wanted.

However, i don't believe that the price should just be thrown out the window.  A price difference is negligible at lower levels (for example,299.85 vs 299.99) however, as the the difference increases, it matters to more and more people.  The question is, how much does the $250 difference matter to how many people?  I think that it won't matter that much to most people, however others may think it matters much more to more people.  After a few years, the sales will tell us which is true.

I do however know that the inital high price WILL deter people from buying a ps3 until the games come out, where as previously they may have just bought it and waited for the games.  Because of the price, they will wait to part with the money until the last minute, when MGS4 comes out or w/e.

I always use a lot of logic to think up the scenario here:

If someone encounters a gaming console in a shop, there's a dilemma for them to buy it or not. With buying the console come advantages and disadvantages. The advanteges for buying a console are clearly how much fun you will later have with your console. The disadvantage is only one: PRICE. If the console you want to buy costs 250 instead of 600 dollars, the disadvantages for buying the console decrease by more than a half. Therefore, if you buy a PS3 instead of a Wii, you're clearly expecting to have at least 2x more fun with your PS3 than with your wii. Now if you take into consideration that maybe the consoles differ only slightly in quality, the PS3 immediately doesn't look so shiny anymore.

Or was that a too simple explanation for you all?

One scenario where your theory doesn't work, is when there is an uninformed parent making the purchase. If the parent is getting a console for their kids, they will probably buy the Wii solely on the price difference.

 

El_Fanboy

QFT

boxes of cereals with pennies' worth of differences to gaming consoles with hundreds of dollars differences. :)) funniest thing i've ever read.

The sale of any item comes down to four things according to experts, often called the 4 P's of marketing. Product, Place, Promotion, and Price. I wonder why they put price in there since it means pretty much nothing??? This thread is borderline retarded. Price is a big factor, if it wasn't then why doesn't sony sell the ps3 at a profit? You say it doesn't matter, so why would they take that huge loss per every console sold? Anyways, clearly the person that made this thread is special, so I will take it easy on him or her. Price doesn't matter for fanboys, and thats about it.tylerdurden2621

[QUOTE="Japanese_Monk"]man [QUOTE="MikeE21286"][QUOTE="goblaa"][QUOTE="MikeE21286"]

OK...........

So you're saying it's preference and not price...

Well riddle me this.......

IF the PS3, 360, and Wii cost $250 each.....What would they buy then

[QUOTE/]

And what would be the chances of the PS3 or 360 being $250 and having no hardware changes? 0%.

At $250, the PS3 and 360 lose a lot of what makes them appealing.

kryloc

That's not the argument TC is posing though. He says its all about preference and not price....therefore meaning people would prefer Wii over PS3/360 (based on current sales). Well this is not entirely true. If you set the prices equal you would see that ps3/360 would sell more. So to say price is not invovled is wrong. To do this comparsion you wouldn't be changing anything but price.

Im not completely sure thats true. After all I dont think you'd be seeing the ps3/xbox360 on Conan Obrien, The colbert report, ellen, and many many other talk shows. Somehting about the Wii stroke a cord. I mean the DS was almost the same yet psp was much closer in costs...

And to the unknowing consumer a core is only 50 dollars more. cmon. Don't donwplay the Wiis success by saying ps3 and 360 would sell the same b/c 360 almost is and its not. Its not as popular as the Wii either.

Price really has little to do with it in this situation. look at how popular the Ipod is and its tons more expensive than all the other portable music players out there. If the product delivers something new and refreshing or simply something that hasnt been done before than it will sell no matter the price.

Expensive Ipod=Cheap Wii

No matter the costs its about the product 9 times out of 10.

The Ipod doesn't really offer anything new and refreshing. Infact it's usually behind the rest of the MP3 players on the market. It simply is a fashion trend that took hold, had false demand that was well played, and took so much of the market that it gained an invaluable amount of accessories for it. Where is it's real advantage lies now.

Are you saying the Wii is a fashion trend? It's cool to have and say, "Hey, wanna play with my wii?"

Cost matters plenty, there are other factors as well. Most people don't get what they truly want or need, because it's too expensive.

errmmm....you didnt read everything did you? The Ipod Simply hasnt been done before. THat is a fact. Thats what i said. Its a simple yet intuitive product and thats why it sells. Not because the hip commercials

Sorry but I didn't read the post....but I will say that I disagree with the topic when it comes to games. An example of this is: My mom wants to buy my lil bro a DS versus a PSP soley based on the factor of price...Do you honestly think that the Wii would be selling as much if it cost the same as a PS3?

BTW, awesome links in your sig :D. 

The sale of any item comes down to four things according to experts, often called the 4 P's of marketing. Product, Place, Promotion, and Price. I wonder why they put price in there since it means pretty much nothing??? This thread is borderline retarded. Price is a big factor, if it wasn't then why doesn't sony sell the ps3 at a profit? You say it doesn't matter, so why would they take that huge loss per every console sold? Anyways, clearly the person that made this thread is special, so I will take it easy on him or her. Price doesn't matter for fanboys, and thats about it.tylerdurden2621

You took price advantage to price doesn't matter. You fail to comprehend what I was saying. I'm talking about deciding on two products that of the same relevance. It's cute you know the 4 P's of marketing, but how about use it where it's should be. It's definitely not here. 

[QUOTE="tylerdurden2621"]The sale of any item comes down to four things according to experts, often called the 4 P's of marketing. Product, Place, Promotion, and Price. I wonder why they put price in there since it means pretty much nothing??? This thread is borderline retarded. Price is a big factor, if it wasn't then why doesn't sony sell the ps3 at a profit? You say it doesn't matter, so why would they take that huge loss per every console sold? Anyways, clearly the person that made this thread is special, so I will take it easy on him or her. Price doesn't matter for fanboys, and thats about it.shungokustasu

You took price advantage to price doesn't matter. You fail to comprehend what I was saying. I'm talking about deciding on two products that of the same relevance. It's cute you know the 4 P's of marketing, but how about use it where it's should be. It's definitely not here.

off topic: the video "Match(Gouki)" is amazing, those Urien parries were just sick.

on topic: I agree. X360 is a 2nd grade-poor man-wannabe PS3 console. 

[QUOTE="shungokustasu"]

[QUOTE="tylerdurden2621"]The sale of any item comes down to four things according to experts, often called the 4 P's of marketing. Product, Place, Promotion, and Price. I wonder why they put price in there since it means pretty much nothing??? This thread is borderline retarded. Price is a big factor, if it wasn't then why doesn't sony sell the ps3 at a profit? You say it doesn't matter, so why would they take that huge loss per every console sold? Anyways, clearly the person that made this thread is special, so I will take it easy on him or her. Price doesn't matter for fanboys, and thats about it.xxThyLordxx

You took price advantage to price doesn't matter. You fail to comprehend what I was saying. I'm talking about deciding on two products that of the same relevance. It's cute you know the 4 P's of marketing, but how about use it where it's should be. It's definitely not here.

off topic: the video "Match(Gouki)" is amazing, those Urien parries were just sick.

on topic: I agree. X360 is a 2nd grade-poor man-wannabe PS3 console.

If you like Match, you'll also like Uraken, Jiro, and Yuki Otoko. Look them up on youtube. I got my playing style from Uraken, my favorite Gouki.

On topic: I'm not trying to say people are poor because they choice the Xbox360 or Wii. After all, both system are great to be a number 1 choice. But, I hate to see people lie to themeselves when they say Price difference made the decision for me. I understand mostly will buy the cheaper brand, but no one is going home solely because it was the cheapest buy. If you had to answer to someone everytime you brought a product how would this sound?

"Why did you buy the Wii?"

"Because it was the cheapest buy out of the PS3 and 360"

does that make sense? Come on...

they buy X360 because they cant afford a PS3, then hope to get some PS3 exclusives.xxThyLordxx

Price advantage does not exist. A myth brought upon people who are, again, scared to face reality. I usually use the car analogy, but I'm going old school with classic cereals. I'm only here to present the truth.

First of all, I must say that price advantage only exist when two products are exactly the same. Example, Breyers' ice cream tastes the same as Eddy's ice cream, so the price advantage will decide which one to buy. However, most products differ from brand to brand especially in the electronic industry.

You want to have a hearty breakfast tomorrow and decided that cereals would be great. Now, you have to go shopping to buy some cereals of your choice. You narrow down the choices to Count Chocula, Franken Berry, and Boo Berry. You always was a Boo Berry lover, and know that this brand is the one you want. You also know that Boo Berry is the more expensive brand out of the three.

Now, will you buy Count Chocula or Franken Berry over your favorite Boo Berry? If you can not afford Boo Berry, then you are now force to buy your second choice; however, if you have the cash you joyfully buy the brand you wanted. It wasn't the price advantage that made you buy the second choice, but the fact that you could not afford your first choice. This is how we mostly choose the products we buy. It's not the price advantage that going to decide what are you going to buy, but the brand that you like most or offers. If that preferred brand is out your price range, than you are force to go with your second, third, forth choices.

People are not going in gaming stores, and buying the Wii just because it's $50-$300 cheaper. Either their buying the Wii because they can't afford the $400-600 dollar machines, or it's their preferred product. That is why PS2 and PS1 outsold brands that were cheaper than them. It was people's preferred product. No one is going to go "Well product A is $400, and product B is $500. I'll go with product A because it's cheaper" Unless product A and B is the exact same thing, no one makes a final decision on price advantage. In fact, price is not a factor at all when deciding(keyword) what product you like best.

shungokustasu

Price is a huge factor. I know lots of people who were PS fans last gen but say, I am not paying $600 for a gaming console. Although they prefer the PS brand, they are turned off by the price.