After year-long speculation that Microsoft is planning to cut Xbox 360 prices, the software giant on Friday gave the hints that its most powerful video game and entertainment system, Xbox 360 will soon see a price drop, apparently realizing the fact that consumers react well to lower cost consoles.
In an interview with Bloomberg Microsoft's David Hufford, a director of Xbox product management admitted that USD 199 price point is the "sweet spot". “We are well aware that the sweet spot of the market is really 199 bucks,” Hufford said in the interview.
As the world's largest software maker recently has committed to add more family-orientated games, Hufford thinks US$199 is the ideal price for the family audience.
With its plans to cut the price of Xbox 360 and add more family titles, Microsoft apparently is trying to follow its rival Nintendo’s success in the gaming industry.
Among the trio of next generation gaming consoles, Nintendo has emerged as the numero uno in April for the fourth consecutive month after selling 360,000 of the popular video game devices in the United States, repeatedly outshining both its rivals Microsoft’s Xbox 360 and Sony’s PlayStation 3 in the US video game consoles market.
The more-powerful systems, Sony’s PlayStation 3 and Microsoft’s Xbox 360, in April, again lagged behind in the fierce battle for dominance in the booming gaming consoles market by moving 82,000 and 174,000 units, respectively.
Launched in November last year, Nintendo’s Wii console retails for $US250, while PS2 costs only $129. The PS3 and Xbox 360 start at $499 and $299 , respectively, while their high-end versions are priced at $US599 and $US399(Xbox 360 Premium System) and $US479 (Xbox 360 Elite System), respectively.
During his discussion with Bloomberg, Hufford confessed that besides the youngsters Nintendo Wii has drawn an audience that wouldn't normally play games, such as soccer moms, and the elderly.
Making a remark on Nintendo’s low-cost gaming device, Hufford said "When Mom walks into the store and sees she can get a console with a game for USD 250, she sees it as a USD 300 value. They've done a good job".
Impressed with the way Nintendo has attracted the women, children and the elderly, Microsoft now intends to adopt the Japanese company’s marketing strategy to win a broader audience than the first Xbox attracted. The Redmond giant hopes this move will help it shake off its ‘hardcore’ image that hampered sales of its sixth generation era video game console, the original Xbox, which was first released on November 15, 2001 in North America.
"If we don't make that move, make it early and expand our demographic, we will wind up in the same place as with Xbox 1, a solid business with 25 million people," said Peter Moore, Microsoft's Head of Interactive Development.
"What I need is a solid business with 90 million people."
Although, Microsoft has not yet clearly confirmed price cut for the console, but Heather Bellini, analyst for the Institutional Investor, foretells that a price reduction may happen as soon as September.
"If they really are going to have a good Christmas games line-up, then they just have to have the largest number of boxes out there so that they sell the largest number of games”, commented Bellini.
Earlier this month, Microsoft has added Blinky, Clyde and other Pac-Man hallmarks to its Xbox 360 game consoles. Microsoft, which has always tried to hook more and more customers, now has made Pac-man, the legendary game, its weapon to boost the sales of Xbox 360.
In March, Microsoft Game Studios and Bungie Studios revealed the first details of the three editions, “Standard”, “Limited” and “Legendry”, of the most-eagerly anticipated Xbox 360 game, "Halo 3", which will hit stores later this fall, also giving gaming enthusiasts three different purchase options.
Announcing the three different SKUs of Halo 3, the companies have divided the gaming community in three kinds: First, those who are really, truly desperate for Halo 3, then those who are sort of desperate, and lastly those who are just your garden-variety desperate.
The companies said that the three different editions are adapted for the tastes of all kinds of gamers.
I agree with bt0164 that cost is not the only issue. However, it does account for a significant portion of why things are the way they are in terms of who is outselling who. I personally opted NOT to buy any of the three consoles, opting for the portable PSP. That was a personal decision, not only because I am getting older, and have less time to devote to playing video games, but also because I like the idea that I can have my recreation wherever and whenever I wish/need. That might be eventually where gaming will go. After all, computing has already gone that way, with the laptop/notebook. It may only be a matter of time. What will set that off is communication between the different devices (PSP communicating with Nintendo DS Lite, etc.)
We shall see.