Microsoft hopes to boost its summer holiday sales by cutting its main Xbox 360 by 13% in the US.

The move marks the first price cut for the Xbox 360 since it launched in November 2005.

This was apparent yesterday, August 8, when Microsoft lowered its premium model console by $50 from $400 to $350. The move comes after rival Sony made its PlayStation 3 17% cheaper in the US, with a price tag of $500.

The Xbox 360 core, which has no hard drive, and its new 120-gigabyte Elite model, will also experience a cheaper price tag in a hope to appeal to a wider audience. The Elite model with high-definition video will be cut by $50 to cost $449.

Traditionally Microsoft has targeted its game consoles at teenagers, but with Nintendo gaining success by targeting older players and women, the US firm has started to expand its audience by making the price cuts.

"As we look to the holidays we want to bring in more gamers and lower the price for those customers," said Aaron Greenberg, head of Xbox 360's group product manager.

Microsoft's basic console doesn't miss the cut either, the console with no hard drive or wireless controllers will be cut by $20, costing $279.

It seems in the gaming industry as consoles become more complicated, and more expensive to make, firms producing them are loathe to reduce prices. However many analysts say the price cut is unlikely to make a big difference.

A smart move by Xbox? - Only time will tell.

Tags : microsoft : price cut : Xbox 360

Comments

By: Dragonfly

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On: 12:34 Aug 9th, 2007
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A big difference?

Although the Wii is the winner in hardware sales, Microsoft have the strongest software figures of the big three. This price drop can only draw in more consumers, which in the end can only be a good thing.

By: dragongee

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On: 01:19 Aug 9th, 2007
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seems to me that every big firm is copying the other at the moment, in the end they will end up the same - which in a few years time could decrease the variety of game consoles...

By: Ulx

On: 04:09 Aug 9th, 2007
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deanogee

seems to me that every big firm is copying the other at the moment,

Well, that's always been the case really, I suppose.
"Rumble" technology for one was picked up by just about everyone.

As for the price drop, it seems like a good idea, for both Microsoft and consumers. I don't know whether the drop will actually help them with the broader audience they seem to have decided to target, but it will still almost certainly improve sales.

By: Dragonsoul

On: 03:23 Aug 11th, 2007
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They'll make it more likely for people who were thinking of buying an Xbox 360 but weren't certain. On the other hand people who are hard core Sony or Nintendo fans probably won't care by a price cut of that size. But in the end as long as supply and demand come together it could definitely work out to Mircosoft's advantage.

By: Black Convoy

On: 06:10 Aug 11th, 2007
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Good idea, what better way to maximize sales of both Madden NFL 2008 (which Gametrailers rated a 9.0 and toted the 360 version as the better of the two) and Halo 3? Microsoft is going to laugh all the way to the bank and the year wont be over yet after that.

By: Animeboy

On: 01:56 Aug 15th, 2007
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The reason they are cutting prices is because the novelty demand is starting to decline, so they are able slowly lower the prices to a more reasonable level. Another reason is that the technology involved in making a XBox 360 is no longer state of the art. It is a well-known fact of Psychology that humans love that which is the most advanced, because it held an evolutionary advantage in the past (survival of the fittest).

Ok, I think the real reason is because the PS2 is more versatile than the XBox 360. The fat cats at Microsoft saw this, so to make their product more competitive, they had to lower the price to the same level as a Sony or nintendo product.