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XBox (Games) The Almighty Buck

Xbox 360 Price Cut Dismissed 36

Posted by Zonk
from the no-rest-for-the-gamery dept.
Next Generation is reporting that, despite comments from director of Xbox product management David Hufford saying that a console's 'sweet spot' is $199, Microsoft has no plans to drop the price any time soon. His comments came from a Bloomberg article we discussed last week. "Some are getting really spun up about the Bloomberg story and inaccurately reading tea leaves that don't exist. I spoke to Bloomberg nearly two months ago and we were talking about NPD data that had just been released, and chatting generally about price points of consoles in the market. The comment, which is accurately reported, unfortunately has now been taken way out of context and being reported as if I am signaling a price drop ... With Xbox 360s selling well at their current price point, Elites selling out at $479, and an insanely great portfolio of games in the market, there's no reason to announce any kind of price drop anytime soon."
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Xbox 360 Price Cut Dismissed

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  • by nweaver (113078) on Monday June 11, 2007 @02:37PM (#19468259) Homepage
    Any price cut will not be telegraphed in advance, as as soon as a price cut is announced, sales will plumet until the cut takes effect.
    • Re: (Score:1, Redundant)

      by wiggles (30088)
      Exactly my perspective.

      It seems like the guy is backpedaling here because they've already seen a drop in sales because of the rumors.

      I own a Wii right now, and I'd like to own a 360 -- but I'm not paying $400 for one.
    • No shit... (Score:5, Informative)

      by WIAKywbfatw (307557) on Monday June 11, 2007 @02:50PM (#19468373) Journal
      No shit. There's even a historical IT precedence for this that's defines such a boneheaded move.

      Ladies and gentlemen, I give you the Osborne Effect [wikipedia.org].
      • The Kaypro computer had already begun to cut into sales of the Osborne 1 (a computer with a 5-inch (127 mm) screen for $1,995) but inventories of the Osborne 1 cleared out, and customers switched almost entirely to the Kaypro.
        --From Wikipedia

        So the Osborne Effect is another urban legend. Why do I keep falling for these?
    • by Turken (139591) on Monday June 11, 2007 @03:16PM (#19468643)
      And not just price cuts... News of newer, better models will also publicly be denied until the time that company XYZ wants the news to be released.

      Anyone remember Nintendo with the DS Lite announcement? Nintendo was vehemently denying all rumors (and a lot of rumors at that) right up to the day before they made their grand announcement of the newer model.

      This latest series of rumors and denials does tell us something though: The price drop is coming, and it is coming soon. Like the early contraction pangs of a woman in labor, there are simply too many rumors and too much corroborating evidence for it to be otherwise. However, by constantly denying the rumors in public, Microsoft is able to keep the rumors from being published in the mainstream media as news. That is where the real damage would come. Hardcore gamers and geeks who follow all the gaming blogs and news sites have either already bought a 360 or are resolved to hold out for the price drop. It doesn't really matter too much if they catch wind of the price drop early. But for the sake of investors and the more casual gamers sitting on the fence and considering investing their money in the 360, Microsoft has to keep the rumor rumbles as quiet as possible for as long as possible.
      • by KDR_11k (778916)
        MS had a temporary pricedrop for the Premium to 300€ around the time of the PS3 launch, I'd expect a real pricedrop to be the same, premium priced like the core, core abolished.
    • Re: (Score:1, Interesting)

      by Anonymous Coward
      The continuing mass of 360s with hardware failures that Microsoft is having to spend massive amounts of cash to replace has delayed a price cut way beyond where it was needed. The 360 is selling at a slower rate worldwide compared to the first Xbox and appears to be bleeding cash at roughly the same rate.

      There were interviews with 360 team members a year or so ago where they made it clear they no longer had the luxury to burn through billions like the first Xbox did. With the massive losses still looking to
      • by rtechie (244489)

        With the 360 completely dead in Japan, and floundering in Europe, it is unlikely that the 360 will even reach the same installed base the first Xbox had after the same amount of time on the market. No price cut in the first two years, the unprecedented hardware failure rate, and major first party titles like Halo 3 and Forza 2 getting ridiculed by gamers show that Microsoft is stuck between a rock and a hard place in the console market.

        The 360 isn't doing that great in Japan, but it's doing better than the original Xbox. Gears of War hit the top 10 sales chart back in January. The 360 simply hasn't had many big relases since then. A much bigger story is the way the PS3 has completely tanked. The PS3 doesn't have a single title in the top 50 in Japan and nothing in the top 20 in the USA and Europe and it's been that way since launch. All of the top titles in Japan right now are Ninendo titles, with the DS being more popular than the wii.

    • by dintech (998802)
      It's always the same.

      "No, there won't be a bigger a hard disk."
      "No, we don't need HDMI."

      Everyone knows there will be a price cut before Christmas so why all the drama and denial?
  • I'm confundled (Score:5, Insightful)

    by JamesRose (1062530) on Monday June 11, 2007 @02:38PM (#19468279)
    How is NOT dropping the price of a product news. I mean, if it were, we're not doing it now we're doing it on this date instead then maybe, but honestly this is just another story adding to the FUD around xbox pricing.
    • It's (sort of) news because despite the fact that Microsoft's own management found that the price which would turn the most profit for Xbox and also give consumers a nice discount overall is much lower than what they're selling them for, Microsoft is practicing bad management skills by not lowering the price. The reason this is news is the documentation stating this price is public and Microsoft chooses to poorly manage this department.
      • by Applekid (993327)
        Unfortunately for Microsoft, "most profit" means "a profit." It's only been a few months of production where the cost to build a 360 at any trim is less than what they sell it for.

        Why would they be so quick to pull the price down and start bleeding again? Especially when sales are still strong.

        Perhaps more interesting are the reported defects with the 360. Yes, lots of people have never had a problem. Then again, lots of people report multiple repairs. If Microsoft wasn't spending so much on support and war
  • I know that Microsoft perceives the Wii as being, essentially, for a different demographic than its own Xbox 360 consoles, but one look at http://www.vgcharts.org/ [vgcharts.org] shows that the Wii is catching up quickly. The fact of the matter is that many cost-conscious, non-casual gamers are getting cheaper Wiis, and might actually be satisfied enough to forgo paying $400 for a second console. Add to this the fact the third-parties flock to the console with the biggest installed bases and lowest development costs. I
    • by Pojut (1027544) on Monday June 11, 2007 @03:27PM (#19468747) Homepage
      If you think about it, there are MANY MANY more people in the Wii's target demographic than there are in the 360's target demographic...

      Example. My girlfriend's parents bought her sister a Wii for her birthday. Her sister has NEVER owned a gaming console and frankly doesn't even really like gaming. She messed around with a Wii at a friends house and instantly wanted one.

      I assure you she would not want a 360. Get my point?
      • I agree with that. My point was simply that the Wii's demographic intersects significantly with the Xbox 360's, regardless of rhetoric espousing their disjointedness. Casual gamers aren't the only people buying Wii systems, but traditional gamers are the only people buying Xbox 360 systems.
    • by KDR_11k (778916)
      I know that Microsoft perceives the Wii as being, essentially, for a different demographic than its own Xbox 360 consoles

      I doubt it. They say that in public to prevent news about Wii success from being bad news for MS but they know that they have to fight for the very same dollars as Nintendo and the Wii is better at it by making people open their wallets that would never consider a 360.
      • That's a good point. I should have said that Microsoft says that the Wii is for a different target demographic.
  • by Dark Paladin (116525) <jhummelNO@SPAMjohnhummel.net> on Monday June 11, 2007 @02:52PM (#19468401) Homepage
    So we're coming out with an Xbox 360 that costs $100 more! Take that, Nintendo!
  • by Coopjust (872796) on Monday June 11, 2007 @03:07PM (#19468557)
    MS isn't going to cut the 360 price points at any time soon. They JUST made the elite $480, and they're not going to do anything which makes it seem like less of a value yet. As others have said, announcing a price cut would be boneheaded for MS, because it would give time for competitors to act appropriately and would decimate sales until the price cut came.

    Now, I wouldn't be surprised if in the few weeks/days before Halo 3, the often predicted price cut comes. It would push sales of Halo 3 for Bungie/MS/retailers, but more importantly the 360 itself. Not to mention all of the wireless controllers, memory cards, and other games. It would be a huge blow to the PS3 if the lower end 360 was availible for 1/3 of the price, and the top of the line for 1/2 the price.

    It's not really a question of "if", but "when" and "how much". If MS was to drop the high end 360 to $300, you could get the 360, 3 additional wireless controllers ($150), 4 rechargeable batteries ($80), and Halo 3 for $10 less than the PS3.
    • by duerra (684053) *

      Now, I wouldn't be surprised if in the few weeks/days before Halo 3, the often predicted price cut comes.
      Why would Microsoft drop the price directly BEFORE the launch of Halo 3? Isn't that supposed to be their system seller? Why wouldn't they keep the price, then drop the price of the console after the sales of Halo 3 start to slow down? That seems like a much better solution (from Microsoft's perspective) to me.
    • by Big Frank (921537)
      If MS comes out with a Halo 3 X-Box with Halo 3 paint scheme and Halo 3 controllers and Halo 3 headset, even if it costs >$750, they'll sell a million of them on September 25, 2007. It makes me conflicted, but I would be standing in line at Best Buy at midnight to get mine. If asked, I'd say it was for my 12 year old .
  • As he said, the unit is selling well at its current price so there is no need for a price cut. Want a price cut? Stop buying it.
  • by posterlogo (943853) on Monday June 11, 2007 @05:14PM (#19470513)
    Considering inflation at ~4% per year, you're getting that much of a price cut just by waiting to buy it. This of course assumes a lot, like you being a job that gives you a raise once in a while.

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