Microsoft of Japan has made the first mention of dropping the price of the Xbox hardware in the region. This comes after disastrous sales in Japan, with Microsoft still unable to shift the 200,000 units initially allocated for launch.
"Even though the system launched after the Christmas season, we still expected aggressive sales in the regions," said John Connors, CFO at Microsoft. "The lack of software quantity in Europe was also a factor.” Then, talking about the Japanese situation, Connors said, “We have to expand the number of systems out there in order to create an attractive development platform, even if that means lowering the retail price."
With the Xbox being outsold by both the PSone and the lowly Dreamcast, it seems that Microsoft now has little choice in the matter. Expect an announcement at E3.