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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: Whatever
By Elementalism on 8/4/2008 3:39:27 PM , Rating: 5
That 1 year head start excuse is getting old.


RE: Whatever
By StevoLincolnite on 8/4/2008 4:36:12 PM , Rating: 2
I agree, Take the Wii for Example, that was released well after the Xbox 360 and it has been selling like crazy in comparison, why hasn't the PS3?

Anyway, If anything I have bought more games for my Xbox than any previous console, I have: Halo 3, Call of Duty 4, Naruto: Rise of the Ninja, Dragon Ball Z: Burst Limit, Assassins Creed, Bioshock, Gears of War 2, GTA IV, Ninja Gaiden 2, Unreal Tournament 3, Mass Effect, and I'll be grabbing Spore and Fable 2 and the almighty Gears of War 2 on the day they are released.

Which really does show how many good quality games are there for the platform, I would love to know some attachment rate numbers for the various platforms, as that to me is the more important data, as the companies usually make money on the games not the consoles, and it generally shows the average quality of a systems game collection.


RE: Whatever
By fibreoptik on 8/4/2008 10:47:34 PM , Rating: 1
quote:

I have: Halo 3, Call of Duty 4, Naruto: Rise of the Ninja, Dragon Ball Z: Burst Limit, Assassins Creed, Bioshock, Gears of War 2, GTA IV, Ninja Gaiden 2, Unreal Tournament 3, Mass Effect, and I'll be grabbing Spore and Fable 2 and the almighty Gears of War 2 on the day they are released.


Holy crap buddy! Go out and get some sun or something! Wow...


RE: Whatever
By StevoLincolnite on 8/5/2008 3:42:48 AM , Rating: 2
It maybe my console, but I do not play it for any longer than 2-4 hours a day at the most, I mainly use it as a HTPC/MP3 Playback device for my entertainment system, besides who can play games when Work is in full swing. o.0


RE: Whatever
By fibreoptik on 8/4/08, Rating: -1
RE: Whatever
By Logica on 8/5/2008 5:50:00 AM , Rating: 2
People don't usually remember this or more likely prefer to ignore a very significant fact. Of the 3 main console markets in the world being Japan, USA and Europe. The 360 only has a lead over the PS3 in ONE of them, being the USA. MS might as well pull the 360 from Japan, since it really isn't selling, and the install base for the PS3 in Europe surpassed the 360 this year with the gap getting wider and wider by the month.

This is happening with the so called "limited" games library for the PS3. This situation will only look better for Sony as time goes on.


RE: Whatever
By drothgery on 8/5/2008 10:33:33 AM , Rating: 2
Yes, but the PS3's sales in Japan have been bad (as opposed to the 360's sales in Japan, which have been effectively nonexistent), so it hasn't built much of a lead there. And, well, Microsoft says that reports of the PS3's lead in Europe are greatly exaggerated (since there's no reliable source like MediaCreate for Japan or NPD for the US, hard numbers available to the general public are lacking).


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