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.
The move reduces the price of the Xbox 360 Premium model by $50, to $350, and follows a move last month by rival Sony Corp to cut the price of its PlayStation 3 machine by 17 percent, to $500.
Faced with unexpectedly strong competition from Nintendo Co Ltd's cheaper Wii console, Microsoft is aiming at expanding the appeal of the Xbox 360 to an audience outside its core fan base of young men.
"As we look to the holidays we want to bring in more gamers and lower the price for those customers," the Xbox 360's group product manager, Aaron Greenberg, said in an interview.
"We're always trying to bring down cost of the box and ... we always try to pass on the savings to our consumers. We feel like this is the right time to do it."
The price of the Xbox 360 Core, which does not include a hard drive, will fall $20 to $280 while the Elite model, which features a 120-gigabyte drive, six times the size of the Premium's, will fall $30 to $450. The cuts will take effect from August 8, Microsoft said.
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.