Will Microsoft drop Xbox 360 price in US?

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Will Microsoft drop Xbox 360 price in US?

March 11th, 2008, 20:43 Posted By: Shrygue

via Games Industry

With the recently-announced Xbox 360 price cuts in Europe, a US price drop may not be far behind according to some analysts.

In the US, the current retail price of the basic Xbox 360 model is USD 279.99 - compared to USD 249.99 for the Nintendo Wii and USD 399.99 for the 40GB PlayStation 3. A price drop of just USD 50 would price the Xbox 360 below the Wii and further increase the gap with the PS3.

"I'm pretty confident that they will maintain a spread between the 360 and the PS3, and think that they are proud enough to care if the PS3 outsells the 360 consistently," Wedbush Morgan Securities analyst Michael Pachter told GamesIndustry.biz.

"Due to the amount of software available and the performance of Xbox Live, I think that the 360 will hold its own until the holidays, then I think that PS3 sales will pick up dramatically - because of Blu-ray and sales of HD monitors.

"So I expect a 360 price cut before Xmas, perhaps to USD 299 for the premium model. If Sony cuts the price before then, I expect Microsoft to cut to at least USD 50 below the price of the PS3."

Colin Sebastian, an analyst with Lazard Capital Markets, agrees that a US price cut is a strong possibility.

"We believe price cuts are also likely in North America on the Xbox 360, possibly combined with the long anticipated announcement of a new hardware sku with a larger hard drive," he told GamesIndustry.biz.

"As for PS3, Sony probably takes a wait and see approach as to whether Blu-ray momentum and an improving software lineup can sustain higher demand, although competitively they may be left with little choice if pricing continues to limit market share."

Will a lower-priced Xbox 360 take away potential Wii customers - especially if Nintendo's system continues to be supply constrained?

"I think that's a fair point," Sebastian said, "although I think the Wii success has more to do with the gaming experience than the price point."

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