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No reason to drop the price on this if it's still selling out
Microsoft may sell the most Xbox 360s at below $199, but it's not going there any time soon

Microsoft’s plot to jump the gun on its foray into the current generation of video game consoles by releasing the Xbox 360 a full year ahead of Sony’s machine appears to be paying off. Developers have had more time to develop software for Microsoft’s system, giving it the current edge in games available.

While Microsoft may be pleased with itself on keeping Sony’s PlayStation 3 at bay, now the company must focus on stealing some of Nintendo’s thunder. The Wii’s innovative remote controller allows it to attract a whole new audience, such as women and the elderly, to play video games.

In order to rule this console generation, Microsoft believes that it needs to start emulating some of Nintendo’s tactics. “If we don't make that move, make it early and expand our demographic, we will wind up in the same place as with Xbox 1, a solid business with 25 million people,” said Peter Moore, a Microsoft marketing VP. “What I need is a solid business with 90 million people.”

To help expand the demographic, select Xbox 360 marketing will take a more family friendly approach releasing more family games and redoing retail displays to emphasize games aimed at children, reports Bloomberg.

“If you don't start building that content and reputation it never comes,” said Albert Penello, director of Xbox global platform marketing. “I don't want to be pigeonholed as a hard-core machine.”

Microsoft also may do something about the price, as it sees the Wii’s relatively lower price point of $250 as a “strong value proposition,” said David Hufford, a director of Xbox product management.

“When mom walks into the store and sees she can get a console with a game for $250, she sees it as a $300 value,” Hufford said with regards to the Wii. “They've done a good job.”

Microsoft may be looking at a price below $200, as Hufford says, “We are well aware that the sweet spot of the market is really 199 bucks.” According to the story, Sony sold 75 million PlayStation 2s at or below $200, making up about 80 percent of all PS2s sold.

Hufford’s comments shouldn’t be taken as any immediate signal of a price drop, however, as he clarifies with the Microsoft Gamerscore blog, “With Xbox 360s selling well at their current price point, Elites selling out at $479, and an insanely great portfolio of games in the market, there’s no reason to announce any kind of price drop anytime soon.”

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bummer
By Kooky Krusher on 6/11/2007 4:31:56 AM , Rating: 3
man, and I had my hopes up that by the time i got back stateside there would be a drop on the price. Oh well. Still, though, I really don't see why the 360 elite is priced where it is. I mean, maybe if the hd-dvd player was built in, i could get on board, but it's really putting a pinch on the wallet at ~$500.

At the very least, it's encouraging to see some recognition of $199 being the "sweet" spot for gaming. unrealistic as it may be for MS or Sony for that matter. I'd settle for being able to pick up the 360 elite for $350 but, as it is, it looks like the current price will be around a while. . . /sigh




RE: bummer
By rmaharaj on 6/11/2007 5:48:48 AM , Rating: 5
Wasn't Microsoft vigorously denying a 360 with HDMI right up until they announced the Elite?

They always do this with new products, because announcing a price drop long in advance will cannibalize current sales. People considering buying one will think "Gee, the 360 is going down to $300 in the fall, so I'll hold out until then."

We all know MS is going to drop the price eventually, and probably in this calendar year. But you can be damn sure you won't hear about it until the price cut actually takes effect.


RE: bummer
By tuteja1986 on 6/11/2007 6:21:54 AM , Rating: 2
I don't think they will do a price drop... they are going to watch as 360 goes strong in Q3/Q4 for GTA 4 , Halo 3 , Mass effect , Blue dragon , Darkness , Eternal Sonata and Devil May Cry 4. Then in Q1 2008 they will reduce the price and i don't think they need to reduce it because they got the titles coming.


RE: bummer
By LtFarva on 6/11/2007 7:24:05 AM , Rating: 4
Actually, I think that's the perfect time to do it. Coupling a price drop with the release of some console-selling games is the best idea yet. That'll make one hell of a holiday season.

And I really do hope some of those games you mentioned are actually going to be console-selling games. I want a 360, but can't justify the price when the only game I want is Gears of War. I know there are some other pretty decent games, just nothing that interests me.


RE: bummer
By encryptkeeper on 6/11/2007 9:54:47 AM , Rating: 1
Actually, I think that's the perfect time to do it. Coupling a price drop with the release of some console-selling games is the best idea yet.

Actually, that's really stupid considering that a $199.99 price point right now would mean they lose money on each console sold. They've lost money since the beginning, and now they're probably about even. But even at $399.99 at the least means a 200 dollar loss at $199.99. No company wants to take that. And the things are still selling. Why, if it's selling, and making some money should they even consider a price drop?

The Wii’s innovative remote controller allows it to attract a whole new audience
Don't forget the price point is attractive at half of the competition, and it's the combination of the two that's made the Wii so successful. Don't let anyone else convince you of that. The 'Cube was cheap as hell, but with nothing else than pricepoint there wasn't much reason to buy one. The original force feedback controller was innovative, but who the hell wanted to pay $179.99 for a fucking joystick?


RE: bummer
By mercilessming on 6/11/2007 11:32:17 AM , Rating: 3
Short term maybe it would be stupid, but long term wouldn't the price lose solidify its Reign this gen. At the price I assure they would fly off the shelf and every kid would have one over the PS3 just because of price and little difference in graphics for the price difference. Even at 250$ it could be king for a long time. Especially now that there is a Used Selection, a “greatest hits” cheap selection and all the new games that many think are looking like super hits. No Matter what Platform you are a fan of, considering I want to Play Stranglehold, Lost Planet and Crysis, I would put off buying a new video card and playing crisis to play Stranglehold and Lost Planet with paying 200 dollars for a video card upgrade and getting a console with 2 big games and the ability to later easily sell everything off when I grew tired of the games and/or console.


RE: bummer
By jadedeath on 6/11/07, Rating: -1
RE: bummer
By encryptkeeper on 6/12/2007 9:36:12 AM , Rating: 2
That's really not the best business theory. No company wants to sell something for half the real cost to try and gain dominance. If the 360 were to go to $199.99 tomorrow, you can bet controllers would be $100.00, XBox live would be $179.99 per year, etc. Microsoft WOULD make it's money back, and not just because it's Microsoft. No company would do that. You don't see Ford or Chevy cutting car prices in half to regain the crown over Toyota. Why not? Because consumers will expect that price permanently. All other guys have to do is wait it out until they raise their prices and then everything would go back to the way it was before, and that company would have lost tremendous profit with no real market gain.


RE: bummer
By jadedeath on 6/11/07, Rating: 0
RE: bummer
By SigmaHyperion on 6/11/2007 3:22:32 PM , Rating: 2
No, they're said that they expect the Xbox group to be profitable starting next year.

The hardware itself is already producing a profit on the cost of the hardware within and has been for some time now. Now it's a matter of producing ENOUGH profit on the hardware, and the royalties, and any other revenue streams (like XBL fees) to fully cover the huge amount of overhead that Microsoft has within its' Xbox Division and end up with something left over. And, yes, that includes making enough money to fix all the ones that break.

And when they produce their long range plans and/or forecasts they are figuring their revenues/costs on what they expect the console to sell at. So, while they are predicting they may become profitable next year that doesn't mean there won't be a price-cut in the near future. It just means that, even with a price-cut they still expect to turn a profit.


RE: bummer
By FITCamaro on 6/11/2007 7:14:50 AM , Rating: 3
I just bought an Elite Friday along with Gears of War. I felt I got my moneys worth. Sure I wish it'd been cheaper though.

I also don't know what people are talking about with it being really loud or getting extremely hot. Sure when playing games you can hear it if theres a period of absolute quiet in the game. But if theres any music at all, you don't hear the console. And after 4 hours of playing Gears, the air coming out of the back was hot but not insanely hot. The case itself wasn't even warm though.


RE: bummer
By bighairycamel on 6/11/2007 7:29:31 AM , Rating: 2
Maybe they upgrading the cooling system in the elites, but I had to send my regular X360 back because it overheated and quit working.


RE: bummer
By MonkeyPaw on 6/11/2007 7:50:05 AM , Rating: 2
I also had to send back my 360, but it wasn't from overheating. In fact, after the console had warmed up, it would rarely crash. It was during the first 5-10 minutes of playing that it would RROD a few times. Then after that, it would run great for hours. Then one day it just stopped working. Not sure what that was all about, but it didn't seem like it was overheating.


RE: bummer
By Jeff7181 on 6/11/2007 10:05:02 AM , Rating: 2
You got a newer version with a quieter DVD-ROM drive. The first couple "batches" of consoles have an insanely loud DVD-ROM drive... kinda like those cheap 52X CD-RW drives you can get that sound like they have a jet engine and are going to fly out of your PC when they spin up.


RE: bummer
By therealnickdanger on 6/11/2007 9:10:44 AM , Rating: 4
It's obvious though, that Microsoft is poised for a price drop soon. If anything, Microsoft will wait until AFTER the holiday season to drop prices. It will boost sales during the typical spring/summer lull, while combating the slew of heavy-hitting PS3 games and establishing themselves as an excellent value entering the 2008 holiday season.

My only hope is that Microsoft gets serious about hardware and drops the Core model completely and adds HDMI 1.3 to the Premium and Elite. I doubt they will do that, but it would be cool...


RE: bummer
By zsouthboy on 6/11/2007 9:40:33 AM , Rating: 2
I have to completely agree with this post:
MS isn't dropping the price until AFTER the holiday season.
Even though everyone simply wants them to.

My other guess would be that the "65 nm" boxes won't have a price drop come with them; rather, they'll be marketed as new, cooler running, more reliable xboxen, first.


RE: bummer
By therealnickdanger on 6/11/2007 10:47:45 AM , Rating: 5
65nm boxes won't be advertised differently at all, they will just suddenly be available and sell like normal. Microsoft probably won't even announce it, it will just happen. There's really no reason to advertise the fact either. 65 and 90 can both play the same games and 90 aren't necessarily time bombs. I anticipate that my current 90 unit will last as long as my old Xbox has.

If people think that a shift to 65nm will solve 360 failures, it's wishful thinking. I think a lot of the 360 RRODs are software related, not strictly hardware. We're not going to see "65nm Edition" plastered on any boxes, that's for sure. The only people that will care or know will be people like us and we'll be able to identify new ones via batch numbers, most likely.


RE: bummer
By FITCamaro on 6/11/2007 12:03:37 PM , Rating: 1
I agree.


RE: bummer
By zsouthboy on 6/11/2007 1:48:23 PM , Rating: 2
I was just guessing, from a marketing point of view.

I do not know how widespread the knowledge of RRODs is, among target consumers. (note that I said knowledge of it happening, not the occurrences themselves) Whether or not it gets marketed in this way will definitely be dependent on that statistic.