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Xbox 360 Arcade Price Drop  (Source: VGChartz)
Microsoft price drop will make Xbox 360 Arcade cheapest next-gen console

The console wars are raging now as the PS3, Wii, and Xbox 360 fight for top spot in market share. One of the reasons the Nintendo Wii is so popular is its price tag. The Wii is currently the lowest cost next generation console available.

According to VGChartz, the Wii may not be the lowest priced console for long. According to an image acquired by VGChartz, the Xbox 360 Arcade console will get a price cut to $199.99 on September 7, 2008. The price cut would come only a few months after the 20GB Xbox 360 received a price cut to $299.99 and the 60GB Xbox 360 was announced.

Microsoft has said in the past that it knows the sweet spot for console sales is $199.99. VGChartz reports that when Microsoft dropped the price of the Xbox 360 in Europe to 199 Euro in February of this year, the console sold at significantly higher volumes than before the price cut was put into effect. VGChartz reports that it’s tracking information shows that the Xbox 360 sold 100% more units in the 6 months after the price cut than before.

The low price leaves many wondering if Microsoft can actually be profitable at a $199.99 price point. At launch the Xbox 360 cost about $525 to build and by November of 2006 the price according to iSuppli to build the Xbox 360 was about 40% less.

DailyTech reported in September 2007 that the Falcon CPU revision in the Xbox 360 made the CPU about 50% less to build. In May, DailyTech reported that the Jasper update would be on the market in August, which would coincide with a significant price drop for the Xbox 360 in early September. The cost to build the Xbox 360 Arcade could be reasonably expected to drop again with the Jasper update.

In short, Microsoft could well be profitable at the new $199.99 price point for the Xbox 360 Arcade. However, when first launched Microsoft was more than willing to take a loss on the console to get them into homes. Microsoft could be doing the same thing with the Arcade and selling it as a loss leader to increase its market share.

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RE: Wow
By jabber on 8/4/2008 2:12:02 PM , Rating: 4
Now give us a HDD case that we can fit any 2.5" HDD of our choosing in so we can make more use of this machine.

I am not paying over $200 for a 120Gb drive.

Big mistake messing around with the HDD's. Some not having one, some have but too small small, some have but slightly larger. Now we have another small size.

RE: Wow
By Arribajuan on 8/4/2008 8:36:58 PM , Rating: 2
I agree,

I think they are really dropping the ball on that one.

They should sell reasonably priced drives and lower live membership costs and really push for online content.

I think it will create more attachment to the console and bring more revenue to everyone in the 360 ecosystem.

RE: Wow
By Alexvrb on 8/5/2008 12:26:57 AM , Rating: 3
The 360 has the most online content of the three, hands down. They've been pushing for online content from day one. Heck, with the latest XNA developments, we're even going to see a lot of homebrew content on XBLA.

As for the price of the drives, you'll get no argument there. They should be a little more reasonable. But by the same token, I really like the portability. It's like having a massive memory card. So it's really a give and take.

RE: Wow
By Locutus465 on 8/5/2008 12:42:12 AM , Rating: 2
Personally I think they should just open up USB discs and write the x-box os to support NTFS/exFAT... Problem solved...

clarification, yes the console technically supports USB discs now but it's limited... No video store downloads allowed for instance... ugh :P

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