Spartan_X Posted July 26, 2006 Share Posted July 26, 2006 Microsoft planning a $100 Xbox 360 price drop? Source: An article on Digitimes.com, citing Microsoft manufacturing partners in Taiwan. The official story: Microsoft rep--"We have nothing to announce at this time." What we heard: Console pricing has been a big topic in the next-gen system wars. Those who gasped when Microsoft revealed that its premium Xbox 360 would retail for $399 probably swallowed their tongues when Sony announced its high-end PlayStation 3 would sell for $599. Nintendo's Wii, on the other hand, is targeting a price under $250. Microsoft has found itself conveniently in the middle of the pack price-wise, offering better graphics and power than the cheaper Wii, and fewer bells and whistles (such as a Blu-ray drive) than the pricier PS3. However, with gamers all over the world still undecided about which console to take home for the holidays, Microsoft may want to sweeten the deal. Taiwanese tech site Digitimes.com is reporting that Microsoft may cut the price of the Xbox 360's premium pack by $100, bringing it down to $299. The article cites Taiwanese OEM component makers, companies that are making parts for the Xbox 360, which claim to have negotiated deals with Microsoft to reduce production costs by as much as 20 percent. The cut in costs is attributed to increased production, decreasing rate of defective parts, and general price deflation of raw materials. The purpose and timing of the alleged price cut is obvious--with Sony taking a lashing of criticism because of its $599 PS3 price point, Microsoft would love to turn up the heat on its main rival. Microsoft didn't launch the 360 a year early to come in second or third place again, and with its willingness to lose boatloads of cash to be the winner in the long run, a price cut could be the extra boost the 360 needs to come out on top. Digitimes' source also says the price cut is in preparation for a $399 Xbox 360 premium bundle with an external HD-DVD drive, in an attempt to blunt Sony's Blu-ray drive-equipped PS3. At E3, Microsoft announced that the drive would be available this holiday season (but didn't announce a price), which would line up perfectly for a holiday bundle. Don't run out and buy Van Helsing on HD-DVD just yet. Microsoft has previously said that no price drop on its console is planned this year, and it may tough out this holiday season with its previous price points intact. Another possibility is that Microsoft will announce some form of bundle with throw-ins, like the rumored $399 Project Gotham Racing 3 bundle, which allegedly includes the premium 360, PGR3, some Xbox Live Marketplace points, and a three-month Xbox Live account. Bogus or not bogus?: Being the high-def film junkies we are, we're hoping it's not bogus. Unfortunately, the PGR3 bundle seems like a more likely scenario. Bogus News source: GameSpot Link to comment Share on other sites More sharing options...
ReAnimation Posted July 26, 2006 Share Posted July 26, 2006 I think this is the same story posted in the gamers news section of the site: https://www.neowin.net/index.php?act=view&id=34283 Link to comment Share on other sites More sharing options...
sn00pie Posted July 26, 2006 Share Posted July 26, 2006 I think this will be a smart move to sell more consoles by the time the PS3 releases. (Y) Link to comment Share on other sites More sharing options...
bdsams Veteran Posted July 26, 2006 Veteran Share Posted July 26, 2006 I dont think they would slash the price to 299$ just yet...im really thinking we will start to see bundles for 399 and 299 like the PGR bundles....although if the did create a premium bundle for 399 with the HD-DVD drive that would be a big slash towards sonys ps3 Link to comment Share on other sites More sharing options...
icecaveman Posted July 26, 2006 Share Posted July 26, 2006 They will when they get cheaper processors but it wasn't scheduled until next year so I wouldn't bet on it. Link to comment Share on other sites More sharing options...
Bhav Posted July 26, 2006 Share Posted July 26, 2006 I know I've said it before, but I'll say it again: Microsoft don't need or want to lower the price. They're selling at a reasonably good rate, and will continue to sell well at its current price when compared to the PS3. Furthermore, they've made $400million of loses since Xbox 360's launch... Link to comment Share on other sites More sharing options...
Jowood Posted July 26, 2006 Share Posted July 26, 2006 Uhhh.... they just recently denied that they will lower the consoles price. Why is this popping up again? And how do we squash it? Link to comment Share on other sites More sharing options...
-Anthony Posted July 27, 2006 Share Posted July 27, 2006 Since, Mr. Microsoft posted it himself, I think this is more thatn a rumor. I think its a good idea they need to sell as many consoles especially before/during the ps3's launch. Link to comment Share on other sites More sharing options...
icecaveman Posted July 27, 2006 Share Posted July 27, 2006 ^ Mr. Microsoft has been wrong on several occasions... :) But yeah it would be clever for Microsoft in the long run but it would make the short term investors very angry. Link to comment Share on other sites More sharing options...
Trong Posted July 27, 2006 Share Posted July 27, 2006 I know I've said it before, but I'll say it again: Microsoft don't need or want to lower the price. They're selling at a reasonably good rate, and will continue to sell well at its current price when compared to the PS3. Furthermore, they've made $400million of loses since Xbox 360's launch... Gates and Allen use $400,000,000 dollar bills to wipe their bums! :p They should work on some cooing fixtures and then lower the price! I don't know what it is about me and cooling. I guess I just like to be on the safe side. Link to comment Share on other sites More sharing options...
bolix Posted July 27, 2006 Share Posted July 27, 2006 wasn't the xbox priced so microsoft had little to none lucrative gain? Link to comment Share on other sites More sharing options...
yanowhiz Posted July 27, 2006 Share Posted July 27, 2006 It might actually help more sales, and in would most likely hurt the PS3. Personally I'm saving up for a PS3, I think it will be worth the $700. Link to comment Share on other sites More sharing options...
Soham Posted July 27, 2006 Share Posted July 27, 2006 i saved $ 2500 for upgrading of my dorm room with PS3 and Wii as well as toshiba HD 50". It happen so the news doesn't change my plan to buy ps3. Link to comment Share on other sites More sharing options...
Matrix XII Posted July 27, 2006 Share Posted July 27, 2006 Everyone talks about their huge losses, but they make some of the money back in the games and accessories. Link to comment Share on other sites More sharing options...
Smigit Posted July 27, 2006 Share Posted July 27, 2006 I predict they will do a bundle for a bit too which will be at the same price but with an older game thrown in and then just after that they will rop the price unannounced. Doubt itwill be by $100 US but it wouldnt be out of the question. Seems like it would be a very good move on their part to drop prices but and despite what they claim (that they wont) I do forsee a drop by the end of the year. Link to comment Share on other sites More sharing options...
giga Veteran Posted July 27, 2006 Veteran Share Posted July 27, 2006 Not to burst anyones bubble but.. Surprise, surprise, no price cut expected Next Generation more or less shot down yesterday's rumored price cut for the 360. Basically all they did was reiterate everything we said, only more elaborately and eloquently (we're still flattered though). Michael Pachter of Morgan Securities breaks it down old-school analyst style:" ... The company plans to sell 10 million Xbox 360 hardware units over the next year, so a price cut in November would likely impact 8 million of these, costing the company $800 million. At a software royalty profit of around $10 per unit, the company would have to sell 80 million incremental software units in order to be in the same place as without a price cut. " ... Our model has Microsoft selling only around 60 million total units of software this fiscal year, so in order to break even on a price cut, they would have to sell 140 million pieces of software. Remember, we're talking about profitability for FY:07, not over the life of the 360." That's a lot of software. Next Gen even mentions Peter Moore's comments to Joystiq during E3: "We had a price drop ... when Sony announced their price." So, don't expect a price drop before next year. Do expect a software bundle instead. linky Link to comment Share on other sites More sharing options...
Smigit Posted July 27, 2006 Share Posted July 27, 2006 Thats assuming a few things but. Firstly it's assuming the drop would be $100, it may not be that drastic. Secondly it isn't taking into account that MS has been working at reducing the manufacturing cost of the Xbox which would absorb some of the loses. yes you would need to sell more software but at the same time you would have more consoles to sell software too not to mention more Xbox live subscribers. If the user buys the console for less then that also leaves them potentially with more money to purchase accessories or games with too rather than just buying the bare minimum. Lastly if they can take sales off Sony and Nintendo they will only benefit in the long run. Maybe it wouldnt matter this generation but if a drop in price saw them with a 5% market swing or something (I have no idea if anything that dramatic would occur...very unlikely but stayu with me), if they can use that to get gamers on their side this generation then it will only help them in future generations. Dont forget that while PS3's development has been troubled Sony very much has the upper hand in the console war with the PS2 still being immensly popular even with PS3 only months from release. Microsoft still has to win back those customers somehow. More users will also see more XBL arcade developments and more interest from developers and then you have a cyclic effect happening. Whether $100 or $50 would be enough of a drop to see huge changes is really something that would have to be seen but I can assure you many users would have a second thought about what console they wanted for Xmas, not to mention how it may influence parents buying for kids. Link to comment Share on other sites More sharing options...
GreenDayPunk74 Posted July 28, 2006 Share Posted July 28, 2006 Good thing I only paid 250 for the premium one. :D Link to comment Share on other sites More sharing options...
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