Print 42 comment(s) - last by FITCamaro.. on Jun 12 at 9:40 AM

No reason to drop the price on this if it's still selling out
Microsoft may sell the most Xbox 360s at below $199, but it's not going there any time soon

Microsoft’s plot to jump the gun on its foray into the current generation of video game consoles by releasing the Xbox 360 a full year ahead of Sony’s machine appears to be paying off. Developers have had more time to develop software for Microsoft’s system, giving it the current edge in games available.

While Microsoft may be pleased with itself on keeping Sony’s PlayStation 3 at bay, now the company must focus on stealing some of Nintendo’s thunder. The Wii’s innovative remote controller allows it to attract a whole new audience, such as women and the elderly, to play video games.

In order to rule this console generation, Microsoft believes that it needs to start emulating some of Nintendo’s tactics. “If we don't make that move, make it early and expand our demographic, we will wind up in the same place as with Xbox 1, a solid business with 25 million people,” said Peter Moore, a Microsoft marketing VP. “What I need is a solid business with 90 million people.”

To help expand the demographic, select Xbox 360 marketing will take a more family friendly approach releasing more family games and redoing retail displays to emphasize games aimed at children, reports Bloomberg.

“If you don't start building that content and reputation it never comes,” said Albert Penello, director of Xbox global platform marketing. “I don't want to be pigeonholed as a hard-core machine.”

Microsoft also may do something about the price, as it sees the Wii’s relatively lower price point of $250 as a “strong value proposition,” said David Hufford, a director of Xbox product management.

“When mom walks into the store and sees she can get a console with a game for $250, she sees it as a $300 value,” Hufford said with regards to the Wii. “They've done a good job.”

Microsoft may be looking at a price below $200, as Hufford says, “We are well aware that the sweet spot of the market is really 199 bucks.” According to the story, Sony sold 75 million PlayStation 2s at or below $200, making up about 80 percent of all PS2s sold.

Hufford’s comments shouldn’t be taken as any immediate signal of a price drop, however, as he clarifies with the Microsoft Gamerscore blog, “With Xbox 360s selling well at their current price point, Elites selling out at $479, and an insanely great portfolio of games in the market, there’s no reason to announce any kind of price drop anytime soon.”

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By Kooky Krusher on 6/11/2007 4:31:56 AM , Rating: 3
man, and I had my hopes up that by the time i got back stateside there would be a drop on the price. Oh well. Still, though, I really don't see why the 360 elite is priced where it is. I mean, maybe if the hd-dvd player was built in, i could get on board, but it's really putting a pinch on the wallet at ~$500.

At the very least, it's encouraging to see some recognition of $199 being the "sweet" spot for gaming. unrealistic as it may be for MS or Sony for that matter. I'd settle for being able to pick up the 360 elite for $350 but, as it is, it looks like the current price will be around a while. . . /sigh

RE: bummer
By rmaharaj on 6/11/2007 5:48:48 AM , Rating: 5
Wasn't Microsoft vigorously denying a 360 with HDMI right up until they announced the Elite?

They always do this with new products, because announcing a price drop long in advance will cannibalize current sales. People considering buying one will think "Gee, the 360 is going down to $300 in the fall, so I'll hold out until then."

We all know MS is going to drop the price eventually, and probably in this calendar year. But you can be damn sure you won't hear about it until the price cut actually takes effect.

RE: bummer
By tuteja1986 on 6/11/2007 6:21:54 AM , Rating: 2
I don't think they will do a price drop... they are going to watch as 360 goes strong in Q3/Q4 for GTA 4 , Halo 3 , Mass effect , Blue dragon , Darkness , Eternal Sonata and Devil May Cry 4. Then in Q1 2008 they will reduce the price and i don't think they need to reduce it because they got the titles coming.

RE: bummer
By LtFarva on 6/11/2007 7:24:05 AM , Rating: 4
Actually, I think that's the perfect time to do it. Coupling a price drop with the release of some console-selling games is the best idea yet. That'll make one hell of a holiday season.

And I really do hope some of those games you mentioned are actually going to be console-selling games. I want a 360, but can't justify the price when the only game I want is Gears of War. I know there are some other pretty decent games, just nothing that interests me.

RE: bummer
By encryptkeeper on 6/11/2007 9:54:47 AM , Rating: 1
Actually, I think that's the perfect time to do it. Coupling a price drop with the release of some console-selling games is the best idea yet.

Actually, that's really stupid considering that a $199.99 price point right now would mean they lose money on each console sold. They've lost money since the beginning, and now they're probably about even. But even at $399.99 at the least means a 200 dollar loss at $199.99. No company wants to take that. And the things are still selling. Why, if it's selling, and making some money should they even consider a price drop?

The Wii’s innovative remote controller allows it to attract a whole new audience
Don't forget the price point is attractive at half of the competition, and it's the combination of the two that's made the Wii so successful. Don't let anyone else convince you of that. The 'Cube was cheap as hell, but with nothing else than pricepoint there wasn't much reason to buy one. The original force feedback controller was innovative, but who the hell wanted to pay $179.99 for a fucking joystick?

RE: bummer
By mercilessming on 6/11/2007 11:32:17 AM , Rating: 3
Short term maybe it would be stupid, but long term wouldn't the price lose solidify its Reign this gen. At the price I assure they would fly off the shelf and every kid would have one over the PS3 just because of price and little difference in graphics for the price difference. Even at 250$ it could be king for a long time. Especially now that there is a Used Selection, a “greatest hits” cheap selection and all the new games that many think are looking like super hits. No Matter what Platform you are a fan of, considering I want to Play Stranglehold, Lost Planet and Crysis, I would put off buying a new video card and playing crisis to play Stranglehold and Lost Planet with paying 200 dollars for a video card upgrade and getting a console with 2 big games and the ability to later easily sell everything off when I grew tired of the games and/or console.

RE: bummer
By jadedeath on 6/11/07, Rating: -1
RE: bummer
By encryptkeeper on 6/12/2007 9:36:12 AM , Rating: 2
That's really not the best business theory. No company wants to sell something for half the real cost to try and gain dominance. If the 360 were to go to $199.99 tomorrow, you can bet controllers would be $100.00, XBox live would be $179.99 per year, etc. Microsoft WOULD make it's money back, and not just because it's Microsoft. No company would do that. You don't see Ford or Chevy cutting car prices in half to regain the crown over Toyota. Why not? Because consumers will expect that price permanently. All other guys have to do is wait it out until they raise their prices and then everything would go back to the way it was before, and that company would have lost tremendous profit with no real market gain.

RE: bummer
By jadedeath on 6/11/07, Rating: 0
RE: bummer
By SigmaHyperion on 6/11/2007 3:22:32 PM , Rating: 2
No, they're said that they expect the Xbox group to be profitable starting next year.

The hardware itself is already producing a profit on the cost of the hardware within and has been for some time now. Now it's a matter of producing ENOUGH profit on the hardware, and the royalties, and any other revenue streams (like XBL fees) to fully cover the huge amount of overhead that Microsoft has within its' Xbox Division and end up with something left over. And, yes, that includes making enough money to fix all the ones that break.

And when they produce their long range plans and/or forecasts they are figuring their revenues/costs on what they expect the console to sell at. So, while they are predicting they may become profitable next year that doesn't mean there won't be a price-cut in the near future. It just means that, even with a price-cut they still expect to turn a profit.

RE: bummer
By FITCamaro on 6/11/2007 7:14:50 AM , Rating: 3
I just bought an Elite Friday along with Gears of War. I felt I got my moneys worth. Sure I wish it'd been cheaper though.

I also don't know what people are talking about with it being really loud or getting extremely hot. Sure when playing games you can hear it if theres a period of absolute quiet in the game. But if theres any music at all, you don't hear the console. And after 4 hours of playing Gears, the air coming out of the back was hot but not insanely hot. The case itself wasn't even warm though.

RE: bummer
By bighairycamel on 6/11/2007 7:29:31 AM , Rating: 2
Maybe they upgrading the cooling system in the elites, but I had to send my regular X360 back because it overheated and quit working.

RE: bummer
By MonkeyPaw on 6/11/2007 7:50:05 AM , Rating: 2
I also had to send back my 360, but it wasn't from overheating. In fact, after the console had warmed up, it would rarely crash. It was during the first 5-10 minutes of playing that it would RROD a few times. Then after that, it would run great for hours. Then one day it just stopped working. Not sure what that was all about, but it didn't seem like it was overheating.

RE: bummer
By Jeff7181 on 6/11/2007 10:05:02 AM , Rating: 2
You got a newer version with a quieter DVD-ROM drive. The first couple "batches" of consoles have an insanely loud DVD-ROM drive... kinda like those cheap 52X CD-RW drives you can get that sound like they have a jet engine and are going to fly out of your PC when they spin up.

RE: bummer
By therealnickdanger on 6/11/2007 9:10:44 AM , Rating: 4
It's obvious though, that Microsoft is poised for a price drop soon. If anything, Microsoft will wait until AFTER the holiday season to drop prices. It will boost sales during the typical spring/summer lull, while combating the slew of heavy-hitting PS3 games and establishing themselves as an excellent value entering the 2008 holiday season.

My only hope is that Microsoft gets serious about hardware and drops the Core model completely and adds HDMI 1.3 to the Premium and Elite. I doubt they will do that, but it would be cool...

RE: bummer
By zsouthboy on 6/11/2007 9:40:33 AM , Rating: 2
I have to completely agree with this post:
MS isn't dropping the price until AFTER the holiday season.
Even though everyone simply wants them to.

My other guess would be that the "65 nm" boxes won't have a price drop come with them; rather, they'll be marketed as new, cooler running, more reliable xboxen, first.

RE: bummer
By therealnickdanger on 6/11/2007 10:47:45 AM , Rating: 5
65nm boxes won't be advertised differently at all, they will just suddenly be available and sell like normal. Microsoft probably won't even announce it, it will just happen. There's really no reason to advertise the fact either. 65 and 90 can both play the same games and 90 aren't necessarily time bombs. I anticipate that my current 90 unit will last as long as my old Xbox has.

If people think that a shift to 65nm will solve 360 failures, it's wishful thinking. I think a lot of the 360 RRODs are software related, not strictly hardware. We're not going to see "65nm Edition" plastered on any boxes, that's for sure. The only people that will care or know will be people like us and we'll be able to identify new ones via batch numbers, most likely.

RE: bummer
By FITCamaro on 6/11/2007 12:03:37 PM , Rating: 1
I agree.

RE: bummer
By zsouthboy on 6/11/2007 1:48:23 PM , Rating: 2
I was just guessing, from a marketing point of view.

I do not know how widespread the knowledge of RRODs is, among target consumers. (note that I said knowledge of it happening, not the occurrences themselves) Whether or not it gets marketed in this way will definitely be dependent on that statistic.

Think people
By Tbonus on 6/11/2007 11:56:59 AM , Rating: 2
A price point of $200 has got to be the way Microsoft if they want to get more parents to buy there console over the Wii! When you have 2.5 kids and a house payment of $600 a month and 2 cars along with braces, and all the other things that comes with raising and maintaing a family every dollar counts. If is going attemped to get the 7-12 age group, then they very well better have a soild plan for talking mom and dad, as well as grandma and grandpa, into buying there system over Nintendo, a system by the way has the name recognition, because to most parents when you ask them about there childs gaming system they almost always say Nintendo. I know this because I worked for five years at a retail store in the electronics department selling games.
Just as an aside does anyone out there remeber the Neo-Geo by SNK? It was the most advance system out there, but no one bought it, because they could not justify the $700 for the system nor the $125 games.

RE: Think people
By darkpaw on 6/11/2007 2:25:11 PM , Rating: 2
$600 a month house-payment? LMAO, maybe in a run down trailer park someplace (or Detriot).

Neo-Geo and 3DO are both the shining examples of how not to sell a console. I knew exactly one person that had a Neo-Geo and thats cause he was a spoiled ass single child and his parents would max out their credit to buy him anything he wanted. Sure it blew everything away at the time, but $200 for a game?

Times have changed, but I think the line is really around $400-500 when most people question what they are buying rather then just spending the cash.

RE: Think people
By BMFPitt on 6/11/2007 3:02:21 PM , Rating: 2
That's what I was gonna say. Property taxes alone around my area can go over $1000 a month.

RE: Think people
By Tbonus on 6/11/2007 4:34:56 PM , Rating: 2
Forgive my lack of understanding. I had no idea that it cost that much live outside of my "small town life", but the you have made my point even stronger. I am a video junkie who basiclly is in need a real fix every since my 360 overheated. To do it once was hard, but to do again is nearly impossible, because with a small town comes a small paycheck, it is the price you pay for the cost of living here.
The point though is not so much how much it cost to live wherever it is that you may live, but rather that it "Cost to Live" and if you are any kind of responsible person you know that a gaming system is not a necessity, but a luxury. A luxury that you want to be sure that you have spent wisely on.

RE: Think people
By FITCamaro on 6/11/2007 5:39:32 PM , Rating: 1
So send it back to Microsoft. They'll likely fix it for you for free.

Wrong approach
By AndreasM on 6/11/2007 4:33:58 AM , Rating: 1
To help expand the demographic, select Xbox 360 marketing will take a more family friendly approach releasing more family games and redoing retail displays to emphasize games aimed at children, reports Bloomberg.

Translation: more barbie/bob the builder/whatever games with gameplay and design meant for brain-dead zombies, not human children.

Somehow I doubt they'll succeed at expanding the market. Sony and Microsoft tried too hard to make their consoles computers/entertainment systems, and now Nintendo is eating their lunch with a traditional console.

RE: Wrong approach
By djc208 on 6/11/2007 7:39:27 AM , Rating: 3
I think they're already missing the point. It's not just that Wii has games that are more "family friendly" its that, coupled with the controler interface and the price point the parents/adults are willing to buy it because they're interested in using it too. It's the motion controllers that get people interested in trying a Wii and the games that keep them coming back.

If Microsoft want's to sell parents they need to push the multi-media capabilities. Being able to access your computer's pictures and music on your TV/stereo, content on demand, fairly cheap HD DVD player, and the kids can play games too.

RE: Wrong approach
By Rockjock51 on 6/11/2007 1:47:12 PM , Rating: 1
I don't own a Wii, mainly because I can't see more than 3 games that are even mediocre. You say it's the games that keep them coming back to the Wii. Help me out here.. what games are there besides Wii Sports and Zelda with Mario Party thrown in as an okay title. I'd really like to get a Wii but I just can't justify it with only 2 games I'm remotely interested in and one that might something.

RE: Wrong approach
By feelingshorter on 6/11/2007 4:17:46 PM , Rating: 3
As djc208 already said, its the controller coupled with the system. The 360 is still using the same controller as the traditional game console. Motion sensing is something that parents will love and its easy to use. The 360 can sell for 200 and it still won't eat at the Wii market.

Even my parents play the Wii more than I do!

I was skeptical as to how the wiimote would stand up but I'm extremely pleased with it. It is much more accurate than you would believe if you haven't tried it.

The Wii truly is a no experience necessary to play game console. My mom, who doesn't know how to turn on the TV, picked up the Wiimote and played tennis in seconds. My little sister, beat me in boxing, in her first try, despite myself having more experience with the game.

Month Ago
By Mitch101 on 6/11/2007 10:08:10 AM , Rating: 2
I mentioned the fall/Pre-Xmas price drop about a month ago but Microsoft may want to do this sooner than later unless they enjoy being the number 2 console like they were to the PS2 on the previous generation. Wii's are selling very well. They are still hard to find but inventory is showing up at places now so the e-bay bastards wont be making a buck much longer. If microsoft is going to make a move it should do it sooner than later every month they wait is a bigger opportunity for the low end to go to Nintendo. (Yes I love my Wii)

Still its also a demographic issue. The 360 is for the more serious gamer just like its previous gen they severly lack kids games. The Wii even though with a few serious titles is geared more toward kids and even women its the not so serious crowd. If you watch the commercials close enough on the Wii you will also notice they follow along the lines of a iPod commercial. Wouldnt be surprised if its the same marketing company doing the Wii and iPod.

Plain and simple The 360 needs a kids lineup and probably cant charge $60 for kids titles. A good $30.00 value lineup would help.

It would be amazing to see the 360 at $200.00 but I would bet we would see a $300.00 360 with a free game first.

They also need to do something about the $200.00 - HD-DVD add on since set top players are now showing at the same price with 5 free HD-DVD movies. Dont believe me check out they have the second gen for $200.00 and its sold out.

When not If the price goes sub $300.00 on the 360 then I will have both my Wii and X-Box 360. All demographics served covered. For the graphic intensive I will buy the 360 version for the fun and kids I will buy the Wii games.

RE: Month Ago
By FITCamaro on 6/11/2007 12:22:31 PM , Rating: 1
Yeah with the Elite I just bought I went on Ebay to see the prices. Some people were charging $800 for one because of the supposed sell out.

I bought a Premium on Thursday night at Best Buy because I couldn't find an Elite in town. Friday I had to return the play and charge kit I bought because it was defective. The Best Buy I went to had Elite's in stock so I returned my premium and got the Elite. Saturday I was again at Best Buy (where I bought the original premium) while waiting for a movie and they then had Elite's also in stock.

So yeah, ebay assholes are ripping people off still. Even the ones that don't overprice the console still rip you off on shipping. $50 to ship a console is insane. I shipped an entire PC in a heavy steel Antec case with $1500 worth of insurance for $40 via USPS.

RE: Month Ago
By BMFPitt on 6/11/2007 3:04:02 PM , Rating: 2
If you pay $800 for an eBayed Elite, you deserve it.

RE: Month Ago
By FITCamaro on 6/12/2007 9:40:33 AM , Rating: 1
Oh I agree. Only an idiot would pay nearly double the cost of something just to own it sooner before everyone else does. And for the people who paid $1000 or more for PS3s and 360s when they were released, those people don't deserve to have their money since they obviously waste it.

Theoretical Store
By BMFPitt on 6/11/2007 7:10:27 AM , Rating: 4
“When mom walks into the store and sees she can get a console with a game for $250, she sees it as a $300 value,” Hufford said with regards to the Wii. “They've done a good job.”
Where does mom shop that she sees a Wii on the shelf?

By Mitch101 on 6/11/2007 10:14:46 AM , Rating: 2
His source of informations
By crystal clear on 6/11/2007 9:10:45 AM , Rating: 2
David Hufford, a director of Xbox product management is talking on/from NPD reports-


Among all gamers, 62% report playing games online, according to NPD’s third annual online gaming report, “Online Gaming 2007: The Virtual Landscape.” The study covers gamers’ perspectives on online gaming via PC, console and portable systems). Systems analyzed include Nintendo’s Wii and DS/DS Lite handheld systems, Sony’s PlayStation 2, PlayStation 3 and PSP handheld system, Microsoft’s Xbox and Xbox 360, or PC/Mac gamers.

Among video game systems used for online gaming, Xbox 360 has the highest percentage of use (54%). Among the 29% who use a video game system to play games online, the majority (54%) uses Xbox 360, followed by PS2 (45%).

Relative to other system user bases, Nintendo Wii users are most inclined (76%) to be online gamers. Xbox 360 and PS3 users are next in line, each with about 7 in 10 reporting that they game online.

According to the report, a relatively large percentage of online gamers are female (42%). Overall, online gamers are most likely to be age 25-44, console owners, casual gamers (defined as players of card, puzzle, word and arcade games), and live in mid income households ($35K-<$75K).

“With the intense interest on the success of MMORPG's recently, it might surprise some that the audience for online games is still largely the casual player,” said Anita Frazier, industry analyst, The NPD Group. “Understanding exactly who is playing what and where is crucial for the industry to realize the potential revenues that online revenues represent for future growth.”

By middlehead on 6/11/2007 9:11:28 AM , Rating: 2
I'd buy an Elite for $400, but I won't buy a Premium for 4 knowing that the Elite will eventually be there or cheaper.

By wallijonn on 6/11/2007 11:38:30 AM , Rating: 2
“I don't want to be pigeonholed as a hard-core machine.”

And yet that is exactly what they were shouting, that the Nintendo was a kiddie machine. Now that developers have started writing games for the Wii in earnest, MS wants a pie of the casual gamer pie. It's not going to do it by coming out with Tetris, Bomberman and Pac-Man. Not at $60 a pop it ain't. The causal gamer wants epics, movies broken up by small slices of game play. They don't want games that they have to play for 3 to 5 hours to get past a hard part, they just want to play a game on "easy". In effect MS will have to come up with some 5 hours games at $20, not 10 hour games at $60. Will parents pay $60 for "Bejeweled"? Unlikely. Will they buy them if they are sold at WalMart for $20? Very likely. So long as there is no violence and no cursing. MS definitely does not know how to make those types of games. They'll need to become Disney for that.

By Biggie on 6/11/2007 1:55:04 PM , Rating: 2
With the strong Canadian dollar we are now pay ~$471 US for an 360, sure they give us a free game, but I'd rather pay less and pick the game I want.
If MS wants to pull away from Sony, they really should drop the price of the system and they probably will right before Halo ships.

By Locutus465 on 6/11/2007 9:48:33 PM , Rating: 2
Well, I've wanted a 360 since they first came out... And today? I own a Wii and an X-Box 1 :P ::hint hint microsoft::


C- "Needs improvement"
By wrekd on 6/11/2007 8:07:27 AM , Rating: 1
The Wii’s innovative remote controller allows it to attract a whole new audience, such as women and the elderly, to play video games.

Is this supposed to be modern journalism? The Wii came out in November and this "women and old people" has reached cliché status. I think DT patrons deserve a little more.

They should charge $99
By Shadowmaster625 on 6/11/2007 12:55:50 PM , Rating: 1
Or provide every customer with a spare unit for when the main one breaks down! The warranty might cover the repair costs, but it dont cover the 6 weeks you're without a console...

"It looks like the iPhone 4 might be their Vista, and I'm okay with that." -- Microsoft COO Kevin Turner
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