Updated: Analyst confirms imminent Xbox 360 price cut

Posted by Aharon Etengoff

San Francisco (CA) - EEDAR analyst Jesse Divnich has told TG Daily that Microsoft will lower the price of its Xbox 360 Elite to $299 this week. According to Divnich, the Pro model will likely be discounted to $249 and phased out within 90 days.

"The Xbox 360 has a tremendous amount of momentum and console sales have remained steady over the last three months; their competitors, however, have faced diminishing sales since February," explained Divnich. "Whilst the announcement from Sony, reducing the PS3 to $299, will have a greater impact on sales over Microsoft's expected price cut, the Xbox 360 should maintain their second place lead into the holiday season. From there, it is anyone's game and I wouldn't be surprised if Sony picked up a considerable amount of ground on Microsoft over the next two months."

However, Divnich noted that the "tide" was likely to "switch back" to Microsoft's favor once Natal is released.

Xbox 360 price cut

"Microsoft will finally be able to offer the mainstream and casual markets an appealing piece of hardware at an affordable price," opined Divnich. "In fact, the only element that is stopping both the PlayStation 3 and Xbox 360 from capturing the 'Wii crowd' is not their pricing structure, but rather that neither offer an appealing motion control system that the Wii crowd likely considers a 'standard' option for any video game console they purchase."

Divnich also cautioned that the PlayStation 3 and Xbox 360 could eventually threaten the Wii's core demographic.

"One day, both Microsoft and Sony will be able to offer an affordable console, with motion control features [and] they will eventually begin to make a run at the Wii's core demographic. This places Nintendo in a sticky conundrum. Do they lower the price of the Wii now and capture as much market share as possible, at the cost of lower profit margins, or do they 'wait and see' and risk losing share to their competitors down the road?"

Jesse Divnich clarifies:

["I'm not officially confirming anything, just know that retail circulars show the price drop for Sunday, so obviously Microsoft must make an announcement this week."]