MS: Recession Will Sell Xbox 360s

[Emabulator]

1UP has word that Microsoft commissioned a survey that makes their case the current recession will translate into more Xbox 360 sales. Videogame companies continue to try to put a positive spin on the impact of the current recession on consumers' holiday spending plans. The latest effort comes from Microsoft, who commissioned the "Xbox 360 Holiday Entertainment Survey 2008" conducted by IPSOS. As you probably guessed by now the results provide statistical evidence that the economic crunch translates into this being a great time to buy an Xbox 360. Follow this link (http://www.1up.com/do/newsStory?cId=3171302) to read the full article.

[KidNicarus]

You gotta love that logic. "Americans are having trouble paying the rent and putting food in their mouths, so this is a great time to purchase an Xbox 360!"

I will say it is pretty amazing that in spite of the global economy crashing games are still selling incredibly well. But yeah, I think this is kinda silly.

[Mephistopheles]

At first I assumed they meant people would be selling their Xboxes and thought that sounded fair enough.

I probably would not be surprised to see Xbox sales go up and I would likewise not be surprised to see all important attach rate drop; people will make the initial investment of console plus a few games, or whatever bundle they get, but I think it unlikely they'll keep buying games at premium prices.

I think MMO figures would be an interesting gaming figure to watch during this period. Dollars to hours they are about the best value for money you can get if you're into that type of game. The timing of WotLK could prove to be really good for Blizzard.

[Ozena]

Wonky logic confuses me. I bet it'll happen, though.

[JasonSuave]

Here's the way I look at it:

xbox 360 + Live + a library of 5-6 solid 4-player party games (Halo 3, Rock Band, etc) =

$600 total/year
or $150/person/year

**a grand total of $3/person/week

Going out to DC for one night a week will run you $50/person/week.

Yeah, video games are starting to sound VERY cost-efficient right now....

[vherub]

it's certainly possible that cash strapped gaming would lead to the "cheaper" systems attracting more buyers. That link isn't very meaty. Certainly a 199 system is more attractive than a 299 or 399 system when the economy is hurting, but is it more attractive than the 250 wii?

[Tinderbox]

I don't have a source to cite, but generally in tough economic times, the entertainment industry (movies and games) do well as people look for distractions from their daily lives and cannot afford the more expensive things (trips etc)

[Philip J. Fry]

Not sure I follow the reasoning here.

Constant fear of losing your job isn't something that causes most people to drop $300 on a console.

Recessions are good for increasing sales of $19.99 budget games for a console that the consumer already owns, but I don't see how the recession inspires the consumer to purchase a brand new console. If anything, a severe recession causes people to keep the PS2 and forego anything current-gen.

[Virtuoso]

The funny thing is that MS is probably at least partially right. In times of recession people often will give up things that have rising costs (like family vacations, with the rising cost of food, fuel, etc), but they still want to spend their entertainment dollars. What is the best bang for you buck? You buy a movie you only watch it maybe once or twice, you go out to see one and you spend 40 bucks and are there for two hours, you buy a video game though, you spend 3 times what you would on a movie, but you usually get at least 6 times the amount of time out of it (3 2 hour movies, versus 12 hours in a game).

I see 360 sales increasing slightly, but I'm betting that game sales increase more. People that already have 360s will buy a larger amount of games because they have already made the initial investment, and once again, a surplus of entertainment money due to not spending it on vacations etc means more money for games.

[gojira]

I just bought some nice cotton flannel shirts from JC Penny's at basically a 60% discount. A great deal. Retailers are so desparate to attract customers right now that they're having some big discount sales.

I can see how MS can claim the same situation will make XBox Arcade sales, but I'm not seeing it. I need shirts to wear. I don't need a new console. Games for the PC or my DS Lite are a lot cheaper and will entertain me sufficiently. I'd like a new console, but I don't need it.

[Everblight]

While the overall message of the article does seem a little counter-intuitive, I think it does make sense that MS having the "cheapest" current-gen console on the market at a time when many people are very cost-conscious could be a big advantage. Then again, it may just mean that the PS2 will retain its legs that much longer.

[gojira]

Or a DS, which is about the same price (actually a bit more expensive, hmm)....

[vallor]

Certainly a 199 system is more attractive than a 299 or 399 system when the economy is hurting, but is it more attractive than the 250 wii?

Cheaper is cheaper. $199 is the "magic price" that attracts more people to product.

$250 isn't bad and is certainly better than $299 or $399 but it isn't $199 we'll have to see if the "Nintendo" and "Wii" labels continue to justify the extra $50 for "normal" people.

Other folks in the market for a console may find themself gravitating more to the $199 price point item when they find that the game library is larger.

At least that is what MS is hoping for based on their "Biggest library" "Biggest number of hit titles" and "Lowest Price" commercials. A little education will inform them about the (almost required) cost of the HDD requirement for the 360, but I bet a lot of people don't figure that out until they buy the console. On the other hand this could be balanced against the extra cost to buy the Wii Fit board.

Sony, on the other hand, needs some super hat trick this holiday, I think. They have one advantage: A blu-ray player and we'll have to see if the predictions about the standard, brick and mortar store cost for a blu-ray movie come true.

Shopping online is still not the norm; retail is still where a lot of people get their movies and they are usually much more expensive at a Frys or Best Buy than they are at Amazon.

[Redline]

I have not read the article (my disclaimer). If it came down to say Holiday vs. 360/PS3/Wii and said Holiday would cost in the realm of $1000->$3000, well, all of a sudden that 360 doesn't look too bad. Especially considering kids would probably be just as happy with that as seeing the real world.

I don't think MS is thinking of people that are in such a poor position that they can't feed themselves, that would be nuts (I'm sure it'd happen though).

[baz]

I'd generally agree with this. If I go in for a huge night out in London, I can spend more than £100 (about $200). Much cheaper to stay in and play games, and I'm choosing to do that more and more.

Even just a few quiets at the pub for a game of footy or a pub quiz and I'll generally spend £20 at least.

[Narradisal]

Here's the way I look at it:

xbox 360 + Live + a library of 5-6 solid 4-player party games (Halo 3, Rock Band, etc) =

$600 total/year
or $150/person/year

**a grand total of $3/person/week

Going out to DC for one night a week will run you $50/person/week.

Yeah, video games are starting to sound VERY cost-efficient right now....

This. I couldn't agree more. If I'm strapped for cash and can't afford a night out on the weekend at £50 or so up London then sitting in playing xbox with my friends and a few drinks is still a good evening of laughs and much cheaper.

Personally I think the Wii's lastability is a bit weak. I wouldn't be surprised if the xbox outstrips the other 2 during christmas, they seem to have the balance of games to initial start-up costs quiet effective. Now only if they didn't have shit hardware.

[Trazzlo the Magnificant]

I agree that the sales of the 360 would probably remain strong, and being lowest price helps.

The problem is that Nintendo must have a massive profit margin on the Wii by now; huge sales numbers, not-so-much-new-generation electronics, and the sales of DS booming at the same rate. Nintendo could compete on price and still remain very profitable.

Sony has the biggest issue, since large layouts of cash are hit by recessions. Plus, their biggest selling feature is Bluray but you need a HD television for that. At the same time, Netflix is starting to stream HD quality video for free when you have a Netflix subscription. If that becomes the norm (as MS thinks it will), then Sony has to convince you that Bluray still has $400 worth of value.

You can buy a 360, play games and watch HD video for $200. Or, if you don't have an HD TV yet and are afraid of laying out the cash until your job is a bit more secure, then the 360 works fine with older TV's. That is also true for the PS3, but the value of Bluray on an SD TV is questionable.

People were saying that we are "years away from HD streaming, YEARS I tell you!", were wrong. We are days away from that and it works pretty darn well.

In our house, the only real issue now is Comcasts 250gb monthly download limit. I am pretty sure we blasted way past that, then looped the world and came back to beat it again (watched the whole 1st season of Heroes in HD in the last 10 days). So far, Comcast hasn't said a thing but that will probably change as Netflix adds more HD content.