Strategic Movements: September 2020

timjsmith

Tim J. Smith, PhD
Founder and CEO, Wiglaf Pricing

Published September 20, 2020

Microsoft Xbox Versioning

Xbox Series S priced at $299. Xbox Series X priced at $499. In the past, Microsoft would release a single gaming console with all the latest tech. Now, they are versioning. The lower priced version will cannibalize sales of the higher priced version, but it will also enable market expansion. Usually, the market expansion overtakes cannibalization. Thumbs up.

Strategic Pricing Movements September 2020: XBox, Peloton, Online Gaming

Photo by Michael Marais on Unsplash

Peloton Versioning

$2495 Bike+ with “bolder sound” and swiveling touchscreen or $1895 older model?  $4295 standard treadmill or cheaper $2495 treadmill? These are the new choices confronting the home fitness subscriber, along with their $39/month subscription. The lower priced version will cannibalize sales of the higher priced version, but it will also enable market expansion. Usually, the market expansion overtakes cannibalization. Thumbs up.

Gaming Up

In the past, premier gaming titles sold for $60 a pop. In 2020, expect to see $70 as Activision Blizzard and Take Two Interactive Software both raise prices on titles like Call of Duty and NBA 2K. Meanwhile, Electronic Arts is releasing Star Wars: Squadrons at $40. Games also often offer in-game purchases, so this may not tell the whole story. But, someone got the message: price hikes on in-demand offerings are usually accepted. Thumbs up.

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About The Author

timjsmith
Tim J. Smith, PhD, is the founder and CEO of Wiglaf Pricing, an Adjunct Professor of Marketing and Economics at DePaul University, and the author of Pricing Done Right (Wiley 2016) and Pricing Strategy (Cengage 2012). At Wiglaf Pricing, Tim leads client engagements. Smith’s popular business book, Pricing Done Right: The Pricing Framework Proven Successful by the World’s Most Profitable Companies, was noted by Dennis Stone, CEO of Overhead Door Corp, as "Essential reading… While many books cover the concepts of pricing, Pricing Done Right goes the additional step of applying the concepts in the real world." Tim’s textbook, Pricing Strategy: Setting Price Levels, Managing Price Discounts, & Establishing Price Structures, has been described by independent reviewers as “the most comprehensive pricing strategy book” on the market. As well as serving as the Academic Advisor to the Professional Pricing Society’s Certified Pricing Professional program, Tim is a member of the American Marketing Association and American Physical Society. He holds a BS in Physics and Chemistry from Southern Methodist University, a BA in Mathematics from Southern Methodist University, a PhD in Physical Chemistry from the University of Chicago, and an MBA with high honors in Strategy and Marketing from the University of Chicago GSB.

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