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Xbox 360 Halo 3 Special Edition Console will be priced at $399.99  (Source: Microsoft)

The Xbox 360 Premium will now feature an MSRP of $349.99  (Source: Microsoft)
Microsoft's Xbox 360 gets its first official price cut

When Sony cut the price on its 60GB PlayStation 3, the industry turned its spotlight on Microsoft for a response. Shortly after Sony's price cut, Wedbush Morgan Securities analyst Michael Pachter predicted that Microsoft would cut the price of the Xbox 360 Elite, Premium and Core to $399, $349 and $249 respectively.

Shortly after Pachter's comments, Microsoft Game Studios VP Shane Kim hinted that a price cut was indeed in store for the Xbox 360. Kim noted that Microsoft needed to better compete with Wii in the entry-level arena. "We need to compete effectively for that customer and part of that is getting to the mass market price point for the console. We definitely are working on that area," remarked Kim.

"The timing depends on a lot of different factors and we'll just keep evaluating those," added Microsoft's Robbie Bach.

The chatter surrounding the price cuts became deafening once leaked sales flyers for major retailers began hitting the web. Ads for Wal-Mart and Toy "R" Us showed the Xbox 360 Premium priced at $349. One day later, a Circuit City ad was leaked which mirrored the $349 price for the Premium and added $449 and $279 price tags for the Elite and Core respectively.

Today, Microsoft officially announced the price drops for the three existing Xbox 360 SKUs. Beginning August 8, the Elite, Premium and Core will carry an MSRP of $449.99, $349.99 and $279.99 respectively.

In addition, the previously announced Xbox 360 Halo 3 Special Edition Console will be priced at $399.99 when it hits store shelves in September. The Halo 3-themed Xbox 360 features an HDMI port like the more expensive Elite and an "authentic Spartan green-and-gold finish." Microsoft also notes that the console will come with a Play and Charge kit.

Those that rush out to buy the new cheaper Xbox 360s may wish to go ahead and register for Microsoft’s new online service site for the console – it’s likely that you may need it in the future. In fact, many may just simply want to wait until the new Falcon-based Xbox 360s hit store shelves despite the current temptation of lower prices.

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By crystal clear on 8/7/2007 5:54:19 AM , Rating: 2
Microsoft Corp said on Monday it will cut the price of its main Xbox 360 video game console model by about 13 percent in the United States, hoping to boost sales ahead of the crucial holiday season.

Launched in November 2005, the Xbox 360 has gone 20 months without a price cut, the longest of any console in history. Sony's PlayStation 2 held its $300 price for 18 months after launching in the United States in 2000.

"It surprised me a little bit because there's not a whole lot of market pressure on them to lower the price," said Van Baker, an analyst with market research firm Gartner.

"Is it going to make an enormous difference? No, because when it comes to consoles, it's not the price that sells the console, it's the games that sells the console and from that perspective, Microsoft's in pretty good shape," Baker said.

Greenberg said Microsoft timed the price cut to coincide with the release of Electronic Arts Inc's "Madden NFL 08", the latest installment of the publisher's top-selling football franchise.

"Summer tends to be seasonally slow, but we definitely see a big uptick starting with 'Madden', and accelerating through the end of the year," Greenberg said.

Microsoft is also banking on the highly anticipated final episode of "Halo", its flagship game franchise, to be a major profit driver this year. The game hits stores on September 25.

"What would I do? I'd shut it down and give the money back to the shareholders." -- Michael Dell, after being asked what to do with Apple Computer in 1997

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