Microsoft: Console Sweet Spot is $199, but No 360 Price Drop

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. What I need is a solid business with 90 million people," said Microsoft marketing VP Peter Moore. 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.

Microsoft also may do something about the price. While applauding Nintendo's strategy with the Wii, David Hufford, a director of Xbox product management, noted that 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." However, Hufford's comments shouldn't be taken as any immediate signal of a price drop: "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."

News source: DailyTech

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This article is really cryptic.

they are saying they want to copy Nintendo's strategy immediately, but they are content with the way things currently are.

although its possible to get the RROD after a year of purchasing the system, most people I know have had their RROD before their year was up.

The Guitar Hero patch was the exception.

No, as of April the XBOX division were still hemorrhaging cash, partly due to lower than anticipated sales (read: they paid to produce more than they sold).

It is but the loss is shrinking as parts change in the xbox360. Cost comes down, they find way to make it cheaper (not saying as in quality). Console typically lose money but make it up with the software license.

Nintendo on the other hand, is making money on each console sold from the start.

The price point is the "point cost" that the xbox360 will sell of the shelfs so to speak. Not how much "loss" they will get for doing so.

Damm it would be nice to see the xbox 360 come down to $199.. Then i might buy one.. but at prices of consoles now a days.. I'm not sure when i'll be getting one just because the prices are still high for me to get one.