Microsoft eyes major Xbox upgrade as Nintendo Wii sales plummet

Posted by Aharon Etengoff

San Francisco (CA) - Microsoft is reportedly eyeing a major upgrade for its Xbox 360 console. According to 1Up, Natal - Microsoft's controller-free motion control technology - will be integrated into the upgraded unit. However, the company is also expected to distribute the new controller as an add-on for existing Xbox 360 consoles.

"The new console won't just be an Xbox 360 with a camera, though - we've heard it will be considered a new platform and carry a new name (Xbox Natal?). It's not clear what sort of upgrades we might see, but some have suggested it will be an slight upgrade of the current Xbox 360 technology," claimed Sam Kennedy of 1Up.

Kennedy speculated that current 360 titles would be playable on the new platform, while future games will be designed to take advantage of Natal-based consoles.  

Meanwhile, the NPD Group has confirmed that Wii sales posted a 57 percent year-on-year drop in May, marking the third consecutive month of significant declines. Although plummeting Wii sales have fueled rumors of an impending price cut, a Nintendo spokesperson insisted the company had "no plans to reduce its prices at this time."

Nevertheless, Wedbush Morgan analyst Michael Pachter told the Wall Street Journal that Nintendo may be forced to lower prices if it did not manage to ship 26 million Wii units by March 31, 2010. Pachter proposed a new price tag of $200, which would allow the Wii to compete with Microsoft's least expensive Xbox 360 console.

It should be noted that Sony has also issued similar denials regarding a rumored PS3 holiday price reduction.  

"I think everybody but us would love to see it given away for free," said Jack Tretton, president and CEO of Sony Computer Entertainment of America. He added that cheapest wasn't always the most successful, but rather, "what you get for your dollar."