XBox 360 Price Cut - $279 to $199

[Demiurge]

Microsoft cuts Xbox price, goes after Nintendo

Microsoft has decided that it would rather be the video game market share leader than make a buck at the business. (Microsoft is the publisher of MSN Money.)
Redmond cut the price of its Xbox 360 to $199. That drops it from its previous sticker of $279. The action may take some business away from the Sony PS3, but it is more clearly aimed at market leader Nintendo which has remained in the front spot for months with its $250 Wii.

According to Marke****ch, "This is a smart move by Microsoft ahead of the holidays, as this makes them the price leader," said Colin Sebastian of Lazard Capital Markets.

There is also a very good chance that the move will put the Microsoft device division back into the red. It struggled for years to make money.

In the fiscal year ending in July, Microsoft made $426 million on $8.1 billion in revenue in the unit it calls "entertainment and devices". It lost a total of $2.3 billion in the operation over the previous two years.

Some of the improvement in revenue at Microsoft's Xbox empire came from games, primarily Halo 3. It is not at all clear that this income can offset such a huge price drop for the Xbox game console.

Microsoft has never been against losing money to weaken competition. With the holidays coming, it has a chance to best it two large rivals.

The move puts Sony in a tough spot. It has been counting on a resurrection of its games division to help improve the company's multi-year lackluster earnings performance.

With cash still pouring from its software operations, Microsoft can afford to wage a price war in the video game market.

http://blogs.moneycentral.msn.com/to...-nintendo.aspx

[Serendipity]

Dangit, I just bought the Pro for $299 :(

[Sami]

I wonder if that means more price cuts for PS3... :)

[bigaudiofanatic]

I think it means that microsoft is going to be coming out with a new system soon maybe christmas or next year.

[Demiurge]

I think it means that microsoft is going to be coming out with a new system soon maybe christmas or next year.

Uh, no.

It means that Microsoft is trying to corner the market on consoles. It's ultimately bad for consumers over the long term, but it's good short term.

[Shizelbs]

Xbox 360 is now cheaper than the Wii.

[Shizelbs]

Uh, no.

It means that Microsoft is trying to corner the market on consoles. It's ultimately bad for consumers over the long term, but it's good short term.

Wouldn't it only be ultimately bad if they were successful in cornering the console market? I'm not entire convinced that such a tactic is really sustainable for all that long.

[Demiurge]

Wouldn't it only be ultimately bad if they were successful in cornering the console market? I'm not entire convinced that such a tactic is really sustainable for all that long.

Yes, and that's my point precisely my point. I put the caveat on the statement that they're trying to corner the market, not necessarily that they will. If they do, it's bad for the consumer because there's no competition.

I don't know what loss Microsoft is taking on these consoles, but I doubt that Sony can match them and price the PS3 at $199 each. The one advantage Sony has is that Blu-Ray isn't dead, which is an obvious selling point now (why I got mine). So they can charge more for it and say you're getting more.

I don't know what this does to Nintendo, their latest console is just collecting dust at my house, unless I have a get together with friends and we're all inside.

It'll be interesting.

[Shizelbs]

I don't know what loss Microsoft is taking on these consoles, but I doubt that Sony can match them and price the PS3 at $199 each. The one advantage Sony has is that Blu-Ray isn't dead, which is an obvious selling point now (why I got mine). So they can charge more for it and say you're getting more.

Thats why I just got a PS3 today.

[Shizelbs]

I wonder what the effect would be to the PS future if Microsoft was again the first to release the next wave of next-gen consoles.

[mmadden28]

Dangit, I just bought the Pro for $299 :(

Accroding to the Xbox website-its the Arcade verison that's $199. The pro is $299. It says the prices are effective 9/5/08
http://www.xbox.com/en-US/hardware/compare101.htm

[candyliquor35m]

maybe they're made in china now

[kuntasensei]

Note that the $299 version now comes with a 60gb drive instead of the previous 20gb. Not a price cut, but extra room is nice.

By farming out the chip fabrication the way they have and reducing the trace size, they're able to greatly reduce the cost per unit, meaning they can sell the 360 without taking a loss like Sony does on every PS3. That's also good for the heat-related issues that plagued the system in the past, since they can reduce mainboard voltage slightly and the CPU doesn't require as much cooling. I'm not sure if these new units include the 65nm GPU core, but considering that it's a great chunk of the per-unit build cost, once the 65nm GPU hits the market, Microsoft should make out pretty well on the 360. Right now, they're betting a lower profit margin against getting the entry-level 360 down to that $199 sweet spot. There's also the rumored future board revision that will put the GPU and CPU on the same die, which would yield them an even bigger savings per unit.

What does all this mean to the consumer? Not much... but the bulk of the great games in the near future are coming to the 360, so it's a good time to jump into the fray if you haven't already.

[mmadden28]

Note that the $299 version now comes with a 60gb drive instead of the previous 20gb. Not a price cut, but extra room is nice.

...

The $299 ver with the 60GB hdd is the Pro version. The Premium version had the 20GB drive.

[avelanchefan]

Hell I have an extra 20gb drive sitting at home, I guess it's time to invest in a 3rd 360.

[kuntasensei]

The $299 ver with the 60GB hdd is the Pro version. The Premium version had the 20GB drive.

Regardless of nomenclature, the 20gb version is off the market and has been replaced by the 60gb version... so my point remains.

[mmadden28]

Regardless of nomenclature, the 20gb version is off the market and has been replaced by the 60gb version... so my point remains.

Yes, but you said it wasn't a price cut-it wouldn't be if your talking about the premium version, but it is with the Pro version.

[kuntasensei]

It isn't a price cut. There's no separate Premium and Pro versions of the system, nor is Premium and Pro used in any way to note the different hard drive sizes. In fact, the "Pro" version of the system isn't even branded as such and is just used by stores to differentiate it from the Elite and Core/Arcade versions. The branding of the middle tier system with an included hard drive has always been just "Xbox 360", regardless of which hard drive is included. If you look at the link you posted earlier, you'll see that I'm right. My box for my launch system has no Premium or Pro anywhere on it, nor do the current 60gb units - they're just "Xbox 360".

The 20gb Xbox 360 was reduced to $299 before this to clear out all the stock since it is being replaced by the 60gb Xbox 360, but neither is branded as Premium or Pro. So my point remains - there's no price cut on the middle tier SKU. You just get a 60gb hard drive instead of the 20gb hard drive at the same price that the 20gb unit was already reduced to.

[mmadden28]

It isn't a price cut. There's no separate Premium and Pro versions of the system, nor is Premium and Pro used in any way to note the different hard drive sizes. In fact, the "Pro" version of the system isn't even branded as such and is just used by stores to differentiate it from the Elite and Core/Arcade versions. The branding of the middle tier system with an included hard drive has always been just "Xbox 360", regardless of which hard drive is included. If you look at the link you posted earlier, you'll see that I'm right. My box for my launch system has no Premium or Pro anywhere on it, nor do the current 60gb units - they're just "Xbox 360".

The 20gb Xbox 360 was reduced to $299 before this to clear out all the stock since it is being replaced by the 60gb Xbox 360, but neither is branded as Premium or Pro. So my point remains - there's no price cut on the middle tier SKU. You just get a 60gb hard drive instead of the 20gb hard drive at the same price that the 20gb unit was already reduced to.

Whatever-You apparently know more than I want to know on this subject-I could care less to argue about it-its all semantics (sp?). All I know is I have what was marketed as the Premium version (for whatever reason they chose I don't care) and the new 60GB 'marketed version (note-not branded as 'pro') was until recently priced higher. If you don't consider that a price cut because of the logic you choose to follow-I don't really care-All I know, as a consumer, is that it has HMDI, and a bigger hard drive, cost less than my original 'premium' version-so to me its a prices cut. There its all my opinion-none of what I say is fact. Take it how you want to.

[krabby5]

I would say it IS a price cut...My original xbox just crapped out and I had to use my Bestbuy PRP to get a new one a couple weeks ago. When I bought the original, it was $399...when I replaced it with the 60gb, it was $349..

less than 2 weeks later it is now $299

[TG Meat]

I never try to look at pricing after a purchase. It kills me when I find it cheaper...

[krabby5]

I never try to look at pricing after a purchase. It kills me when I find it cheaper...

you do get 30 days price match. But in my case I didnt buy it again. I exchanged for a new one. I did get credit for the full amount that I paid, so I got an extra $50, but I dont think I can price match for another $50 on an exchange. But if and when I have to exchange the 360 for another one, I will get credit for paying $349 and get money back at that time...

[jchas41]

I'm done with Xbox 360. My 3rd unit just crapped out, I probably had a total of 10 hours on it (it sat collecting dust for probably 8 months before I finally went out and got Madden 09). This time its the disk drive, after playing for about 20 mins or so I get an unreadable disc error and have to restart the game. Because I'm out of warranty by 2 months, Microsoft wants me to send them another $99 to fix this problem. Forget it, never again will I spend money to repair this flawed product.

[mmadden28]

I'm done with Xbox 360. My 3rd unit just crapped out, I probably had a total of 10 hours on it (it sat collecting dust for probably 8 months before I finally went out and got Madden 09). This time its the disk drive, after playing for about 20 mins or so I get an unreadable disc error and have to restart the game. Because I'm out of warranty by 2 months, Microsoft wants me to send them another $99 to fix this problem. Forget it, never again will I spend money to repair this flawed product.

Sorry to hear about your issues, but thought I would throw this out there, if you have or happen to come across one cheap, the HD-DVD player add on can be used as a gaming drive (at least I'm pretty sure-I don't use it any more now that I have a standalond HD-DVD player).

[kuntasensei]

Nope, you can't play game discs in the HD-DVD drive.

Hate to hear about the dead drive. I feel your pain... I'm on my 10th 360 since launch, and actually bought a spare to use while one is in repair. But I'm a crackhead like that.

[mmadden28]

...... I'm on my 10th 360 since launch, and actually bought a spare to use while one is in repair. But I'm a crackhead like that.

I'm still on my first. :D :p
I'd say its 2nd gen model. IIRC I got it Feb after launch.
Always ran it horizontal with the cabinet door open. It looked best horizontally in the entertainment center (WAF).


Then when I rearranged and moved the Xbox on an open shelf next to the Center speaker, I put it Vertical. After awhile I started getting the RRoD WTF? It was getting better airflow now than before. I was about to call in support, when for some reason I deceided to orient it horizontally again. Haven't had it again since. Crossing my fingers and such. Its just too friggin loud. Once I get the cabinet ventilation going, I'm stowing it out-a-sight and out-of-sound.

[jchas41]

Nope, you can't play game discs in the HD-DVD drive.

Hate to hear about the dead drive. I feel your pain... I'm on my 10th 360 since launch, and actually bought a spare to use while one is in repair. But I'm a crackhead like that.

I've heard all too many stories about people going on their 5th...8th...10th, 360! Microsoft really screwed a lot of people, and by the sounds of it they knew they had a seriously flawed product. With the new price drop my concern is are they actually using CHEAPER parts?!?! If so, I'd be seriously concerned...
I guess I should have bought a PS3...

[mmadden28]

Well I think the biggest issue most had was the Red Ring of Death (RRoD). And I think MS actually came through by increasing the warranty period to 3 years for that issue. I think (no personal experience) that they even provide a month of Live credit for the time its OOS. So other than inconvenience-what more could they have done? Use of cheaper parts really has yet to be seen what if an impact it may have-Don't you think that MS learned about negative publicity about the RRoD and woudl do whatever they could to avoid that in the future regardless of what compnents they choose to use? Don't you think they are doing even more rigorous testing now than before?

[Demiurge]

I've heard all too many stories about people going on their 5th...8th...10th, 360! Microsoft really screwed a lot of people, and by the sounds of it they knew they had a seriously flawed product. With the new price drop my concern is are they actually using CHEAPER parts?!?! If so, I'd be seriously concerned...
I guess I should have bought a PS3...

How did they screw people? Do you really think they wanted this to happen?

I'm on my first unit (which is a launch unit), and so are all of my RL friends. A bunch of people here have had issues. Microsoft didn't try to run from the problems. In fact, they extended warranties and replaced them. About the only thing that's a valid complaint is the hassle of sending it back and being without it for a time.

Nobody can claim there's a quality issue now. They have addressed it properly, and they say they've sold 6 times the units as the previous weekend after the price cut.

[jchas41]

How did they screw people? Do you really think they wanted this to happen?

I'm on my first unit (which is a launch unit), and so are all of my RL friends. A bunch of people here have had issues. Microsoft didn't try to run from the problems. In fact, they extended warranties and replaced them. About the only thing that's a valid complaint is the hassle of sending it back and being without it for a time.

Nobody can claim there's a quality issue now. They have addressed it properly, and they say they've sold 6 times the units as the previous weekend after the price cut.

Do I think they wanted this to happen? No, however I don't think they did their due diligence either. They wanted to rush the product to market. You are very lucky. Both my brothers and my best friend have had to send our 360's back at least twice. My brother and I are both in the same boat now, we both have repairs that are not covered under warranty. I'm not a microsoft hater, I'm simply pissed off that there seems to be (IMO) a serious quality control problem. Disk drives should not be faulty after 20 hours of use. In my brothers case, he can start a game and the screen will freeze at the game's loading screen. No RROD, so Microsoft wont do anything without the $100 fee.
I hope the newer machines are more reliable, I sincerely do. Unfortunately, in my case there have been serious QC problems. Good luck to all of you, I hope your 360's continue to run.