You will have doubtless seen escalating gossip in recent weeks that foretells a major drop in the price of Xbox 360 hardware, with the most oft touted reduction being $100 in the US and €100 in the EU. From what we can tell, this is based on nothing more than the fact that a cut in price at the point two new machines - Sony's PlayStation 3 and Nintendo's Wii enter the market - simply makes commercial sense.
Speaking exclusively to SPOnG, Microsoft's Peter Moore outlined the thinking in Redmond at this time. When asked how much the Xbox 360 will be this Christmas, Moore explained, "We're all feeling pretty comfortable with where we're at right now. I'm not sure why we'd change it. Sony gave us a price drop at E3. Obviously we don't talk about pricing [openly] and stuff happens but we have no plans to cut the price right now."
Moore continued, "I think that our volume feels good, our corporate speed feels good, the content feels great, Xbox Live is just on fire, so we're very happy with things as they stand."
Of course, even if we received a letter from Bill Gates written in his own blood, promising that there would be no Xbox 360 price cut in the coming months, we wouldn't believe it, as chopping $100 from the asking price of 360 makes buying the console a complete no-brainer for parents shopping for a 'grown-up' games machine this Christmas. We'll have to wait and see exactly how low the Xbox 360 will go.
We'll have a lot more from Peter Moore, covering all aspects of the emergence of the Xbox 360 platform, in the coming week. You can catch SPOnG's last interview with him here.
Speaking exclusively to SPOnG, Microsoft's Peter Moore outlined the thinking in Redmond at this time. When asked how much the Xbox 360 will be this Christmas, Moore explained, "We're all feeling pretty comfortable with where we're at right now. I'm not sure why we'd change it. Sony gave us a price drop at E3. Obviously we don't talk about pricing [openly] and stuff happens but we have no plans to cut the price right now."
Moore continued, "I think that our volume feels good, our corporate speed feels good, the content feels great, Xbox Live is just on fire, so we're very happy with things as they stand."
Of course, even if we received a letter from Bill Gates written in his own blood, promising that there would be no Xbox 360 price cut in the coming months, we wouldn't believe it, as chopping $100 from the asking price of 360 makes buying the console a complete no-brainer for parents shopping for a 'grown-up' games machine this Christmas. We'll have to wait and see exactly how low the Xbox 360 will go.
We'll have a lot more from Peter Moore, covering all aspects of the emergence of the Xbox 360 platform, in the coming week. You can catch SPOnG's last interview with him here.
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Comments
tyrion 26 Jun 2006 11:34
1/6
As with all businesses, Microsoft will only make a price cut when sales slow and they need to re-invigorate them. It makes no commercial sense to cut the price of a quickly selling item.
Anybody who thinks that Microsoft, Sony or Nintendo have a pricing plan, with drops at specific intervals, prepared before the console launches, that they stick to unwaveringly needs to pass round the name of their dealer.
Microsoft certainly didn't plan to drop the Xbox price in the UK after only six weeks. Sony won't drop the price of the PS2 until sales slow down very significantly.
They may plan for a price cut after a certain length of time, but they won't stick to it blindly without paying attention to how the product is selling at the time.
Tons of people whining away on internet forums that "Microsoft should cut the 360 price to undermine the PS3" or "Sony are too greedy, they should cut the PS2 price now" won't affect how these companies look at how they price their wares.
Anybody who thinks that Microsoft, Sony or Nintendo have a pricing plan, with drops at specific intervals, prepared before the console launches, that they stick to unwaveringly needs to pass round the name of their dealer.
Microsoft certainly didn't plan to drop the Xbox price in the UK after only six weeks. Sony won't drop the price of the PS2 until sales slow down very significantly.
They may plan for a price cut after a certain length of time, but they won't stick to it blindly without paying attention to how the product is selling at the time.
Tons of people whining away on internet forums that "Microsoft should cut the 360 price to undermine the PS3" or "Sony are too greedy, they should cut the PS2 price now" won't affect how these companies look at how they price their wares.
OptimusP 26 Jun 2006 19:39
2/6
And still you have the small fact that slicing the price with a 100 euro's means MS is making a 100 euro's more loss on hardware that's allready loss-leading at almost 100 euro's.
Combine that with the promise to be profitable with the Xbox-project at 2007 towards shareholders (not being so will result in it being axed). No a planned pricedrop is not going to happen unless demand drops big time as stated above.
Combine that with the promise to be profitable with the Xbox-project at 2007 towards shareholders (not being so will result in it being axed). No a planned pricedrop is not going to happen unless demand drops big time as stated above.
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jordanlund 26 Jun 2006 21:11
3/6
I don't know why anyone is treating price cuts as some big surprise. In the run up before the launch one of Microsoft's VP's, one Todd Holmdahl (Xbox product group), had this to say:
"We will wind up cost-reducing the product every year"
Now compare that with what was done on the original XBox:
11/15/2001 - $299.99
05/15/2002 - $199.99
05/14/2003 - $179.99
03/30/2004 - $149.99
If anything we're over-due for the first 360 price cut. The only thing that prevented them from doing so was the absurdly high PS3 price.
"We will wind up cost-reducing the product every year"
Now compare that with what was done on the original XBox:
11/15/2001 - $299.99
05/15/2002 - $199.99
05/14/2003 - $179.99
03/30/2004 - $149.99
If anything we're over-due for the first 360 price cut. The only thing that prevented them from doing so was the absurdly high PS3 price.
soanso 26 Jun 2006 23:41
4/6
If the sales are going ok then there's no need to cut the price. I think a cut after christmas is more likely when there's a barren spell of software releases.
The PS3 pricing must have been a godsend for MS. They must all still be partying about it.
But Sony could still launch with a lower price if they wanted to. Nintendo did it with the GC in europe. Gave it a price cut before launch, which I thought was actually a pretty clever move because people seemed to buy an extra game with that saved £40. So Nintendo got their money regardless and the punters got another game.
The PS3 pricing must have been a godsend for MS. They must all still be partying about it.
But Sony could still launch with a lower price if they wanted to. Nintendo did it with the GC in europe. Gave it a price cut before launch, which I thought was actually a pretty clever move because people seemed to buy an extra game with that saved £40. So Nintendo got their money regardless and the punters got another game.
jadnice 27 Jun 2006 00:39
5/6
From a pricing perspective, Microsoft is in the drivers’ seat. They could mark down the price of the Xbox 360 come Dec and really put the punch on the PS3 and subsequently affect the Wii also. I can't think of any other time in gaming history where one gaming system or company has that sort of advantage. Can anyone think of any other times this has happen?
crs117 28 Jun 2006 03:43
6/6
OptimusP wrote:
Combine that with the promise to be profitable with the Xbox-project at 2007 towards shareholders (not being so will result in it being axed). No a planned pricedrop is not going to happen unless demand drops big time as stated above.
I have heard them promise that the xbox would be profitable by the end of 2007, but i have yet to see where they actually said they would axe the product if it wasnt. That would be retarded especially with all the plans they have for xbox live in the coming years.
I think it would be good to have a "holiday sale" of the x360 around the ps3 launch and temporarily either drop the price 50-100 or at least include a game, possibly a mail in for a free game type of offer. This would make the 360 a no brainer next to the prohibatively expensive ps3.
The Wii will still be a total impulse buy. Hopefully at $200 it will be hard to pass up.