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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 Chaser on 8/5/2008 10:25:30 AM , Rating: 2
Your queue doesn't speak for everyone. You like 2D games? Great! Glad you are satisfied. But not everyone is pleased with Donkey Kong like graphics or hardware. They expect higher capabilities for the prices they pay for the "next gen" consoles they choose to spending their hard earned money on.


RE: Whatever
By kelmon on 8/5/2008 12:14:56 PM , Rating: 2
You misunderstand me. What I am saying is that good graphics don't make a good game. A good game can be improved with good graphics, but if the game isn't there to begin with then simply adding pretty graphics isn't going to make it any good. Given this fairly obvious point, simply suggesting that games are better on Console A because it is more powerful does not make sense.

To be honest I tend to consider people who spent money on "next gen" consoles and who think the games are going to be better on the new console as mad. It's even sadder if you need HD graphics to gain pleasure from gaming. No doubt the next generation of consoles will come along with super HD graphics or something and suddenly the games you think are great now won't do anymore. It's all rather pathetic.

In fairness, I do think the 2D platform game represents the pinnacle of gaming but mostly because the jump to 3D messed up the controls. This probably shows my age.


"Nowadays you can buy a CPU cheaper than the CPU fan." -- Unnamed AMD executive

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