Many expected Microsoft to announce Xbox 360 price cuts across the board at this year’s E3. After Sony's announcement of a $100 price cut for the PlayStation 3 , Wedbush Morgan Securities analyst Michael Pachter predicted that Microsoft would slash the price of the Xbox 360 Elite, Premium and Core systems to $399, $349 and $249 respectively.
For those that labored through Microsoft’s E3 keynote, there was no such announcement. So if you were disappointed with Microsoft's E3 keynote and the announcement of a Halo 3-themed Xbox 360 instead of price cuts, this bit of news may make your ears perk up.
According to Microsoft Game Studios VP Shane Kim, a price cut is in store for the Xbox 360 game console. In an interview with Bloomberg, Kim talked of competing with the Nintendo Wii and revealed that "We need to compete effectively for that customer and part of that is getting to the mass market price point for the console. We definitely are working on that area."
Kim declined to give a date for when the price cut would occur, but a holiday 2007 price cut would do wonders for the platform along with the release of Halo 3 and Grand Theft Auto 4. “The timing depends on a lot of different factors and we'll just keep evaluating those,” said Microsoft’s Robbie Bach.
The price cuts may be financially feasible for Microsoft once the 65nm Falcon chips start rolling off the assembly line . According to Dean Takahashi, the 65nm IBM processor and ATI graphics chip are 50 percent cheaper to produce than their 90nm counterpart and also run cooler.