Tuesday, 25 June 2013

The Price Of Xbox An Economist

The price of Xbox an economist at Harvard's blog when Microsoft announced the price of Xbox One, it seemed excessive compared
The Price of Xbox an Economist at Harvard's Blog
For example, with the starting price of the previous generation. However hours after the announcement Sony surprised with the 399 euros for PlayStation 4. Now the question is to what extent the $ 499 console from Microsoft can be a drag something that has been an economist at Harvard blog.

The consultant Rafi Mohammed  recently published a blog on the Harvard Business Review an entry in which notes that the fundamentals of the battle for the next console game consoles are set according to sales this holiday season.  In this sense indicates that the importance of setting a relatively low price for the system with the objective of maximizing the overall benefits.

Mohammed recommended directly to Microsoft to lower the price of Xbox One, which was too high due to the number chosen by Sony for PlayStation 4. The Economist refers to a common strategy in the console market selling the machines prices even below its actual production cost to achieve a significant installed base and raise cash by selling games.

Since the profits come from the sales of video games and accessories, pricing strategy is simple place the low prices for the consoles put in the hands of the players, said Mohammed. The more consoles are sold, the greater the potential benefit.

The economist added that the perception that the price of Xbox One is too high is embedding in the minds of consumers. In this sens although Microsoft believes that its new Xbox offers more value Historically consumers have not been willing to pay more for that peak, although ultimately offer more value.

In this regard, Mohammed cites the case of Kodak whose premium pricing strategy initiated in 2007 did not come effect and, together with other factors such as changes undergone by the world of photography in recent years, led to its bankruptcy declared in 2012.

Thus the sentence economist Xbox One and disadvantaged party Quote in this sense an Amazon.com poll-before Microsoft policy change regarding restriction of Second Hand market in which 94 percent of respondents were placed for the purchase of PS4 One Xbox instead.

With this scenario, Microsoft recommends economist lower the price of Xbox One or sell a package with some cuts to a lower price. The good news is that there is still enough time for the company to take this decision and is at a more competitive level when the machine hits the shelves later this year concludes.

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