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Analyst forecasts price drop for Xbox 360

Perhaps in response to Sony dropping the price of the PlayStation 3, Wedbush Morgan Securities analyst Michael Pachter said to investors on Monday that he believes that Microsoft will answer with price cuts to all Xbox 360 models, reports Next-Gen.

"The value proposition for the PS3 is increased at the new lower price point, putting increased pressure on Microsoft to cut the price of its Xbox 360. The 80GB and 60GB PS3 models compare favorably to the 120GB and 20GB Xbox 360 models," said Pachter. "We think that the $499 PS3 compares quite favorably with the $399 Pro 360 model, which has only a 20GB hard drive and no HDMI output."

"Because of this favorable comparison, we believe that Microsoft is all but compelled to cut prices, and we think the price cuts will come no later than at Microsoft’s Tuesday night press conference," added Pachter.

Pachter predicts that the $299 Core system will drop to $249, the $399 Premium down to $349, and the $479 Elite will get the biggest cut of all to $399.

The analyst also brought up Microsoft’s slight shortfall in its goal to ship 12 million Xbox 360 consoles to retailers by June 30 – a target missed by 400,000 units. Pachter said, "Last week, Microsoft announced a slight Xbox 360 shipment shortfall (11.6 million units versus prior guidance of 12 million units through June 30), and we do not believe that the company is prepared to allow Sony to erode its pricing advantage."

The price cuts to the Xbox 360, if true, will help distance the Xbox 360 Elite model from the PlayStation 3. Both consoles feature HDMI output – a big selling feature for those with HDTVs. Currently, the 60GB PlayStation 3 and Xbox 360 share the exact same price point in the Canadian market.

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While they're at it
By bkm32 on 7/10/2007 9:52:58 AM , Rating: 4
Reduce the prices of subsequent add-ons. Which ones? I'm glad you asked.

--20GB HDD slashed from $100 down to $50, even better $20
--120GB HDD slashed from $179 down to $150, even better $120
--64KB MC slashed from $40 down to included with every stinking system, controller, etc.
--Wi-fi adapter slashed from $99 to $49 even better included with every system.
--Wireless controller slashed from $49 to $29 to included with every system configuration.

Regarding the price drop in the Core version, MS must realize that even the Wii has 512KB of memory for downloads and such. One more thing, the Wii comes with a game and Wi-fi. If Ms really wants to re-coup some losses, then sell Core version with the following:

Pro Casing: By reducing the number of case configurations from 3 to 2 eliminates a manufacturing line (i.e. saves $$).

Wireless Controller: Reducing the number of controller types (wired and wireless) eliminates a manufacturing line (again, saves $$).

Include the 64KB MC: Some memory is better than no memory. This also allows game developers to not hold back due to the possibility of a configuration with no memory.

Include the Wi-fi add-on: every X360 customer receives a XBL account. Make it easier to use and stop forcing people to bring their X360 into the living room where there may be an ethernet cable.

Pack in a game (s): The Wii has one. This/these could be casual games from XBLA, as long as they're free.

Even better just make the current Core $199, the current Pro $299, and the Elite $379. However, without making some Lean-Manufacturing changes, MS will continue to lose $$ on this system.




RE: While they're at it
By darkpaw on 7/10/2007 10:03:59 AM , Rating: 4
The accessories and licensing are how the MS and Sony cover for some of the loss they take selling the systems. They won't cut the prices, even if they are severly over the top. The MS HDD, memory, and Wireless adapters are insanely overpriced definately, but I don't see that changing.

Its also MB not KB on the memory. 64KB wouldn't hold a fraction of most saves.


RE: While they're at it
By epsilonparadox on 7/10/2007 10:04:34 AM , Rating: 2
quote:
Pack in a game (s): The Wii has one. This/these could be casual games from XBLA, as long as they're free.


It comes with Hexic in XBLA.


RE: While they're at it
By webdawg77 on 7/10/2007 10:49:09 AM , Rating: 2
quote:
It comes with Hexic in XBLA.


Only the 360s with HDDs come with Hexic.


RE: While they're at it
By bkm32 on 7/10/2007 12:55:24 PM , Rating: 2
Are you trying to be funny?


RE: While they're at it
By timmiser on 7/10/2007 7:28:38 PM , Rating: 2
I don't think he was. His point is that their are free games in Xbox Live so it essientially does come with a free game. Granted, you must have the HDD but for a $249 core system, you shouldn't be getting a free game with that system.


RE: While they're at it
By Lonyo on 7/10/2007 11:50:23 AM , Rating: 4
I'd like to see you buy a notebook drive for $20.


RE: While they're at it
By bkm32 on 7/10/2007 1:04:36 PM , Rating: 4
You're right. Newegg.com doesn't sell anything less than 40GB @ about $56.00. It seems that 20GB is obselete. Why MS, why can't we upgrade our own HDD?

MS can make Windows to work on just about any PC on the planet, but can't get it's $300-$480 machines to accept any COTS external HDD. What gives? This is such an "Apple" move.


RE: While they're at it
By omnicronx on 7/20/2007 11:46:11 AM , Rating: 2
Its called compatibility, you want a big hd, go buy an external drive, works with 360's.
Whats even worse i understand the prices are expensive, but as someone said, this is where they're profits lie, games and accessories. Also you can not expect to be getting prices like that for oem parts, like come on, no matter what mainstream product you buy there is always going to be a markup. Just look at buying a pc, in parts its cheap, buy a whole computer from certain companies and its a whole different story. and even if you do find it to be just as cheap, (/me points to dell) most of the parts they use are crap anyways.


Analysts are brilliant!!!
By Homerboy on 7/10/2007 9:30:12 AM , Rating: 3
I think this price-cut is pretty much a no-brainer isn't it? Somebody got paid to make this "analysis"?




RE: Analysts are brilliant!!!
By Legolias24 on 7/10/2007 9:44:05 AM , Rating: 2
LoL, can I have his job?

I too think (just as someone else has said) tha this price cut will coincide with the release of of the updated hardware later this fall.


RE: Analysts are brilliant!!!
By bkm32 on 7/10/2007 10:01:06 AM , Rating: 2
Exactly. However, these "anal-ysts" neglected the behind money-makers--accessories. The original pricing of the Elite was in-line with buying a Core with the 120GB HDD for a total of $479.98. So, the accessory prices must be taken into account for a balanced pricing scheme. This might be hard work, so don't expect it any time soon.


RE: Analysts are brilliant!!!
By Tsuwamono on 7/10/2007 3:42:46 PM , Rating: 2
ya basic math always stumped me in elementary school too. You know what... we should just pay all non-high school graduates to flip burgers at 100k a year. That should even things out


RE: Analysts are brilliant!!!
By timmiser on 7/10/2007 7:40:06 PM , Rating: 2
No, now that the rumour is out, MS must act quickly since potential buyers are now standing by waiting for these cuts before they go buy.


Price cuts with revisions?
By Eurasianman on 7/10/2007 9:24:07 AM , Rating: 2
Perhaps this price cut will come later on this fall, when Microsoft releases the updated XBOX 360 with the die shrink.




RE: Price cuts with revisions?
By DingieM on 7/10/2007 9:37:58 AM , Rating: 2
I'm almost 100% sure that will happen.

But what about the price of the HD-DVD add-on? Will that drop too?

And I would like to have the movie download service over here in Europe/Holland!!
Its a shame they only have it in the US while the service is a very good option next to renting physical (HD)DVD's.

Oh and what about IPTV????


RE: Price cuts with revisions?
By omnicronx on 7/20/2007 11:48:29 AM , Rating: 2
The HD-DVD addon will not drop in price until standalone players hit the mark of 200$. Right now its the cheapest solution for a High Def player anyways.


SD Card Reader
By Iridium130m on 7/10/2007 1:15:30 PM , Rating: 2
Forget the pricey M$ proprietary memory cards, just give me my own SD card reader so I have more space to take my arcade games and saved games to my friends house.




RE: SD Card Reader
By Legionosh on 7/10/2007 3:47:36 PM , Rating: 2
..hmmm. I know Nyko makes a USB card reader/Hub for the 360 (I bought one on sale at Gamestop for like $10. Awesome. Doubles as a PC card reader as well).

I haven't tried it yet but it may be possible to use the card reader as your storage device for game saves, XBL accounts, etc. (I do know the 360 can use external HDDs as storage devices, but again I don't know if it can be used in place of the normal HDD or normal memory card).

Just some food for thought.

Kevin

legionosh@msn.com


RE: SD Card Reader
By Vertigo101 on 7/10/2007 9:02:57 PM , Rating: 2
You are mistaken. You cannot use anything other than an official MS sanctioned storage device: either a Hard drive, or Memory card. You can read music and pictures off of misc. USB storage items, but no save files or arcade games are allowed.


Bundles?
By edge929 on 7/10/2007 12:04:35 PM , Rating: 2
Give me a Gears of War bundle with the Core system and an extra wired controller for $300 please.

I'm one of many that does not have an HD capable TV nor do I want one. I'd run the 360 off my widescreen LCD computer monitor via the VGA cable. And $100 bucks for the wireless adapter is just highway robbery. Make it $30 and I'll swallow it, better yet, include the damn thing.




RE: Bundles?
By bkm32 on 7/10/2007 1:05:38 PM , Rating: 2
Amen.


I predict no price drop
By dagamer34 on 7/10/2007 9:14:21 PM , Rating: 2
No price drop will come until there's a reason to own a PS3 guys. Especially with Halo 3 coming up in September, everyone who's been holding back now will buy a Xbox 360 then anyway. I don't see multiple heavy-hitting games in the PS3's horizon. The 360 might see a slight decrease in sales, but people care about more than just price, they care about games as well, otherwise it would be easy to argue that the Gamecube should have beaten the PS2 (and we all know how that turned out).

Also, with MGS4 FINALLY confirmed to be non-exclusive, the only PS3-exclusive game people care about is FF XIII, and I really wonder how long that's going to last. Plus, since it's not coming out until at LEAST next October or so, the PS3 is a dead horse.

Geez, analysts today are quite stupid. I'd like my $200k+ salary now please.




RE: I predict no price drop
By leper on 7/10/2007 10:37:37 PM , Rating: 2
quote:
people care about more than just price, they care about games as well, otherwise it would be easy to argue that the Gamecube should have beaten the PS2


The Gamecube had some great games but the PS2 killed it in this department.


Cuts
By Haltech on 7/10/2007 11:24:38 PM , Rating: 2
Price Cuts For Falcon, Price Cuts For Falcon and guess what Price Cuts For Falcon.




RE: Cuts
By bkm32 on 7/11/2007 3:41:30 PM , Rating: 2
Uh, what R U trying to say?


I would rather
By rdeegvainl on 7/10/2007 8:59:48 AM , Rating: 1
As long as the subject is price cuts, i owuld rather they drop the core from the sku list completely and put the other two sku's in the lower price ranges respectively. Just a 50 dollar price cut on the pro, and a 100 dollar price cut on the elite as speculated wouldn't give buyer much of a reason to go pro instead of elite, but also would delay more price cuts till much later also. I know it is all speculation.
Also the guy is really comparing the hardware of the 360 pro with the 60gb PS3? that kind of makes me think he doesn't really know about them.




RE: I would rather
By blckgrffn on 7/10/2007 9:09:06 AM , Rating: 2
I think the guy is saying that the feature set on the PS3 overcomes that of the premium xbox, and makes it worth the extra money to many to spend the extra $100. That statement makes obvious that the elite, with it's lack of wireless, HD optical drive, etc. is an even worse value proposition, despite it's bigger HD.

Here's to hoping the premium gets a 60 gig drive and drops to $299. Or keep the current HD and add wireless. Either way, I would probably get one if it drops below $300 with that kind of feature set, and not likely before.


Price drop? Duh!
By IcY18 on 7/10/2007 9:15:21 AM , Rating: 2
While this may confirm what everyone is thinking i'm pretty sure everyone with any knowledge on the console newsfront could predict by now, later in its shelf life, that Microsoft will lower the price on the 360.

Point is, analysts should have been saying this accurately awhile ago if they want to qualify as analysts.




RE: Price drop? Duh!
By IcY18 on 7/10/2007 9:49:26 AM , Rating: 1
Ha! Beat you to calling out these "analysts"


"Spreading the rumors, it's very easy because the people who write about Apple want that story, and you can claim its credible because you spoke to someone at Apple." -- Investment guru Jim Cramer











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