Microsoft to Cut Price of Xbox to Challenge Sony

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Microsoft Corp. is taking its videogame battle with Sony Corp. to a new low in the U.S.

The American company is laying plans to drop the price of its Xbox videogame console in coming weeks, in a move to boost demand for games ahead of the traditionally slow summer season, according to people familiar with Microsoft's plans. The cut would signal a new phase in a growing battle between Microsoft and Sony. Microsoft has followed the Japanese videogame giant ever since it first rolled out its Xbox game console in late 2001 -- 18 months after Sony's PlayStation 2 hit the market. Sony has also led in cutting its price in the U.S., a year ago dropping the PlayStation $20 to its current level of $179. Microsoft dropped its price to the same level on the same day.

A spokeswoman at Sony's U.S. videogame unit said that even if Microsoft cuts its Xbox price, Sony has "no immediate plans to lower the price," of the PlayStation 2. "We will make adjustments when we feel the market is ready," said Molly Smith, a spokeswoman at Sony Computer Entertainment America Inc. in Foster City, California. The plan to not match Microsoft is in part a reflection of Sony's leading position in the market. Its PlayStation 2 continues to outsell the Xbox and GameCube and has a high number of popular games that aren't available on the other machines.

But game makers say they expect Sony will cut the price of the PlayStation 2 in May at the E3 videogame industry conference in Los Angeles. In the videogame business, price cuts are a carefully used tool that almost never fail to goose sales of game consoles and, in turn, games.

News source: CNN

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