With the Xbox 360 having been on the market for over a year
now, the rumors of an impending price cut have been constantly batted around.
stated back in 2005 before the console first launched to expect yearly
price cuts on the Xbox 360.
As certain factors started playing out in Microsoft's favor
including the delay of the PlayStation 3 from spring 2006 to fall 2006
( March 2007 for Europe)
and the higher price tags of $499 and $599 respectively
for the 20GB and 60GB PS3s, Microsoft backed off on talks of price cuts. When
asked about an Xbox 360 price cut in early October, Peter Moore simply said
A Microsoft spokesman followed
up later in October by stating that there are "no plans to adjust the
price of the Xbox 360 this year."
In a recent interview with A+E
Interactive, Microsoft’s Robbie Bach is asked about the inevitable
release of the next generation “Xbox 720.” Bach’s response was that the
engineers are always working on the future products, but that cost reducing the
Xbox 360 “seems to be the first order of business.” Lower overall component
costs will likely come into play as the hardware used in the Xbox 360 ages along
with a planned die shrink from 90nm currently used on the Xenon processor to a
65nm SOI process in 2007.
But while Microsoft is looking to reduce costs to improve
the profitability of its Entertainment and Devices Division, it’s still unclear as to when
customers will actually see any dramatic price cuts directly from Microsoft.
Some vendors are taking matters into their own hands by offering special promotions or rebates
with Xbox 360 systems, but Microsoft will likely let the PS3 dance around in
the ring for a few rounds before it starts unloading with price cuts.
quote: It's called supply-and-demand, duh. Shortly prior to launch, Microsoft wasn't in a position to negotiate with suppliers.