Microsoft sets the record straight, again

One of the more popular reoccurring rumors of late concerns the possibility of an Xbox 360 price drop. The door for such rumors were reopened following the announcement of Microsoft financials which revealed that the Entertainment and Devices Division was losing less money than expected. This spurred questions as to whether or not Microsoft would further its loss on each console sold by cutting the price on its Xbox 360 console.

According to a Seattle P-I story, a Microsoft spokesman did the usual parrot act last week and said that the company has "no plans to adjust the price of the Xbox 360 this year."

With the Microsoft's console priced a comfortable $100 below its prime competitor Sony's machine, there is little reason to adjust pricing.

Microsoft still loses money on every console sold. However, manufacturing costs for the machine are falling faster than expected, thus improving financial outlook.

"We are seeing lower cost-per-console. We're coming down the manufacturing cost line, and in fact we're doing better than what we had hoped for," said Microsoft CFO Chris Liddell.

Microsoft's entertainment and Devices Division posted a 70 percent increase in revenues; though the division still had a loss of $96 million, down from $173 million from the same quarter a year earlier.

Robbie Bach, president of Microsoft's Entertainment and Devices Division, projects that the Xbox business will become profitable in 2008 fiscal year.

To date, Microsoft has sold six million Xbox 360s worldwide since launch. Even with the appearance of competition, Microsoft is anticipating a considerable holiday season where Xbox 360 will reach an installed base of 10 million.

"Death Is Very Likely The Single Best Invention Of Life" -- Steve Jobs
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