Chicago (IL) – Rumors about Microsoft planning to cut the price of its Xbox 360 game console, but now there appears to be sufficient evidence that such a move is imminent: Flyers and internal memos posted on the Internet suggest that the price of the Xbox 360 Pro (Premium) console – Microsoft’s volume system – will drop by $50 from $349.99 to $299.99.

Various gaming websites confirmed an earlier report by the Wall Street Journal about the upcoming price cut. Kotaku, for example, posted ads from Best Buy and K-mart as well as an internal memo from GameStop that confirm the $299.99 price beginning Sunday, July 13. The price of the $450 Elite system is generally believed to remain unchanged.

So, why the price drop?

There may be two sides to the story. One is the life-cycle of the console. As the production matures, production cost goes down (which has been confirmed by Microsoft over the past six quarters) and enables the company to drop the price to make the package more attractive.

On the other side, the Wii and the PS3 have significant momentum and are hurting Xbox 360 sales especially in Europe and Asia. According to NPD, the Xbox 360 was the second worst selling game console in May: 186,600 units were just slightly ahead of the Playstation portable, which sold 182,300 units. Sony sold 208,700 PS3s and Nintendo 675,100 Wiis and 452,600 portable DS consoles.

Combination of Both

Jul 11, 2008 16:33     

Cheaper production and the sales are slowing. This will really compete with the Wii, only being $50 more.
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