Sony’s PlayStation 2 (PS2) dominated the game console market from 1997–2003 with 123 million units sold. Today, Nintendo’s Wii has 62 percent of the market. Prices to achieve this spectacular growth have fallen continuously from $400 at launch to $250. Sony’s PS3 with 20 percent market share at $1,000, then $600, and now $399 competes in a more upscale segment of the game console market against Microsoft’s Xbox at 18 percent market share with prices that started at $760. Initially Xbox and PS3 tried to compete head-to-head on add-ons such as extra hand controller sets. Now, brinkmanship pricing has broken out with Xbox 360 discounted from $760 to a range of $400 to $343. Which firm is likely to blink first?
Sony’s PlayStation 2 (PS2) dominated the game console market from 1997–2003 with 123 million units sold. Today, Nintendo’s Wii has 62 percent of the market. Prices to achieve this spectacular growth have fallen continuously from $400 at launch to $250. Sony’s PS3 with 20 percent market share at $1,000, then $600, and now $399 competes in a more upscale segment of the game console market against Microsoft’s Xbox at 18 percent market share with prices that started at $760. Initially Xbox and PS3 tried to compete head-to-head on add-ons such as extra hand controller sets. Now, brinkmanship pricing has broken out with Xbox 360 discounted from $760 to a range of $400 to $343. Which firm is likely to blink first?
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