[youtube]https://youtu.be/yLZzIgi3YNc[/youtube]
Presenting our continued coverage of Gamescom 2015 with an interview of Vincent Tucker, Director of the Logitech Gaming Group. Our Andreas Nie talks to Vincent about their latest products, the Logitech G29 and G920 Driving Force, and gets to the bottom of many of your guys questions surrounding Logitech’s next gen peripherals.
Some pretty interesting answers…
We hope you enjoy the show!
Looks to me like Logitech have gone too far the other way. The G29 looks like it provides a great experience for console users. However that comes at the expense of the features PC users loved (like the shifter). I think their comment about not burdening users with the cost of a shifter is a bit of a copout.
The thing is, that’s just mass production in action.
On a unit like the G27, that’s been in production as long as it has, all initial R&D and factory fitout expenditures have been long since recouped. The unit has sold so many that it’s basically down to the cost of the components + labour + shipping. Which is why it continues to sell for nowhere near the retail price, and generate a profit.
And the resulting profits from that increased cost efficiency just drove its success even higher.
Literally the easiest thing they could have done was release the G28 with a different chip on board. But I would be willing to wager that licensing deals with consoles required the wheels to be visually distinct from a product lineup perspective. (Because marketing drives engineering, unfortunately.)
So, given that they had to make cosmetic adjustments to every piece, that’s a sizable retooling sunk cost. They also needed to add licensing for the xbone and ps4 to the cost of manufacturing and tooling amortization. And they understand that the low volume of sales resulting from the higher price point also means they need to amortize the costs over fewer sales. (feedback loop)
Long story short, you can probably price the console tax in at $100 a piece, and the retooling budget to be in the order of millions since they manufacture their own components end to end, and the cost of running the factories and shipping out stock to retail wings at least in the order of magnitude of 50 million.
And they have to do this with a view that will make share holders happy, share holders who were happy to hear that they were exiting the peripherals business.
I would assume that they keep selling the G27 despite cannibalizing their own sales, because the profit margin on the two units is similar, and not selling the G27 when they’ve already paid all the costs for warehouses full of them, is just a little bit silly unless you can get some fancy accounting happening.
The great news for you, Gil, is that as a PC user, there’s no reason you can’t buy a G27. And indeed, Logitech makes its money either way.
“Consoles….consoles….consoles…consoles”, – Vincent Tucker.
“Good bye Logitech”, – PC-users.