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DFC Intelligence: Is Elite an Error?
>> From next-gen.biz:
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With the launch of Xbox 360 Elite, Microsoft is now chasing Sony for the high-end market. But will this strategy alienate mass-market consumers? In this excerpt from its new report, DFC Intelligence weighs up the arguments...
When video game systems are priced in the $200 range and lower a small price change can really move product and consumers tend to be very price sensitive. However, in the $300 and up range consumers tend to be a little more careful with their purchase. Consumers don't want to spend $400 on a piece of hardware and be told they are not "elite" and only getting second best. At that range the tendency is to want to spend the money on the best or else wait until you can afford the best.
The biggest problem with the Xbox 360 Elite is probably the issue of HDMI output. Consumers can understand what a bigger hard drive means and can also feel comfortable knowing that they can always upgrade their hard drive. However, it is a safe bet that the vast majority of consumers aren't quite sure what an HDMI port means. You can be sure that the sales clerks in your average retail store will probably be telling a lot of different stories.
Of course, this ignores the fact that a year ago Microsoft was arguing that you don't need HDMI to do high definition and for the vast majority of consumers regular component cables will in fact work just fine. However, in the average consumer mind they don't know that. All they know is that one day they may want a high definition system and if they are spending this kind of money they better go with the high-end system. Or maybe, they should just go home and play with their PlayStation 2 while they research the issue some more and let the market shakeout.
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Full Story: next-gen.biz (2 pages)
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