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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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Rumor is...
By TreeDude62 on 8/4/2008 2:52:45 PM , Rating: 2
The rumor a few moths ago was that Blu-Ray drives went into production for the 360 and would be released in September. I am not saying it is true, but the timing is right. Just a thought.

I was planning on getting one around September, so this works out well for me. I will probably grab the 60gb. The 20gb is way too small and the 120gb is way to expensive.

RE: Rumor is...
By someguy123 on 8/4/2008 9:33:26 PM , Rating: 2
i don't know...I highly doubt it. this would give sony a cut on every system and game sold on bluray. m$ definitely doesn't want sony to increase profits, especially with the ps3 gaining in sales fast with only 4.5m less sold.

i'd say, if anything, they'd have to stop asking for royalties per-disc so that companies can have games similar in size to bluray games. having a bluray drive would just give sony more money to make games, and also would give them a marketing edge. I can picture it "ps3, so good even our competition use our hardware".

RE: Rumor is...
By fibreoptik on 8/4/2008 10:48:46 PM , Rating: 2
Sounds about right.

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