UPDATE: $50 Xbox 360 price cut details emerging

Yesterday (the 24th of July), AO updated the 1 August $100 price cut rumor with news from XboxScene, which vaguely commented that the 360 would see a price cut of $50. No further details had emerged from that original rumor about a 1 August price drop, and the news from XboxScene seemed not worthy of more than a quick update.

Close on the heels of the XboxScene report, however, The Hollywood Reporter comes with more details that mirror the XboxScene report. With the corroborating reporting, it now seems the appropriate time to revisit the rumor mill.

David Ward over at Hollywood Reporter reports that “sources” have said that 8 August 07 is indeed the date of a 360 price drop, and that the price cut will be $50. Microsoft would respond only indirectly, saying: “”We have no announcements to make on pricing at this time. While price matters, content is king. And no other system is offering all the games people want to play this holiday at a better price than Xbox 360.”

The reporting doesn’t specify whether the $50 cut will be across the board, only apply to a few SKUs, or if, in fact, some SKUs will see a larger price drop.

As you know, the report we had on 13 July, which I discussed HERE, predicted an across-the-board price cut of $100 across the board.

If that’s not the case, a $50 price cut to the Core would allow it to directly compete with the $250 Wii. Dropping the Premium a full $100 would bring the Premium to $299 — one of those $50 premium sweet spots that might present a very nice choice for consumers. Both the Core and Premium would become direct competitors to the Wii in that situation: one directly, and one for a mere $50 premium over both the Wii and the Core. While dropping the Core to $199 would be the best of all worlds, production costs hover just around $200 at last count, and with the $1 billion tax charge-off, Microsoft might be wiser playing it safe at the low end. Finally, a $75 cut for the Elite, bringing it to $399?

In any case, now that the “2 Weeks of Hell” are over for Microsoft, during which the media would give MS no break and unfairly both lambasted and underestimated MS’ prospects, it’s suddenly heady times again.

Hardware and software sales are way up. It’s a great year for the gaming industry, for which combined hardware and software sales are up 31%, to $1.1 billion in June, year to year over the previous year, and up 42% or $6.1 billion during the first half of 2007 alone, over the previous year. Further, in June–despite the PS3 sales strong uptick due to Sony’s own price drop–the 360 still outsold the PS3 by a very comfortable by 2 to 1 (198,400 units vs. 98,500 units). (Of course, Japan is (always) another story.) While the Wii outsells both MS and Sony, among the two true next-gen consoles, Microsoft has a solid next-gen console, and has several options open to maintain its lead over Sony. (I suppose Bill Gates wouldn’t consider simply buying Sony?)

Heady times, and rumor watching times too.

Lime out



Filed under Business, Gaming, PS3, Wii, Xbox 360

2 responses to “UPDATE: $50 Xbox 360 price cut details emerging

  1. Yes, we know, and reported back on the cross-link!

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