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Xbox 360 price cut is temporary: Here's what's really happening

Jul. 13, 2008 Paul Thurrott | Paul Thurrott's Supersite for Windows

Well, the rumors were partially right. For weeks, we've been hearing that Microsoft would soon drop the price of the mainstream Xbox 360 console (the one with no real name; it's just called the Xbox 360) from $350 to $300 in the US. And they did. Sort of. For now. What's really happening is that Microsoft is changing the configuration of this mid-level Xbox 360 to include a 60 GB hard drive instead of the original 20 GB hard drive. But for a limited time--that is, while supplies last--you can buy an existing 20 GB Xbox 360 console for $300. But once they're gone, the new Xbox 360, with a 60 GB drive, will be what's sold on the market. And it will still cost $350.

Here's the press release:

Microsoft Corp. is giving consumers more gigabytes for their buck. The company today announced an Xbox 360 console with triple the storage space of the original console, but for the same price of $349 (U.S.) estimated retail price (ERP).

Available in retail stores in the U.S. and Canada starting in early August, the upgraded Xbox 360 will include a 60GB hard drive for storing the growing wealth of digital entertainment available for the console, including music, movies, television shows and game content. In addition, Microsoft today dropped the price of its 20GB Xbox 360 console in the U.S. and Canada to just $299 (U.S.) (ERP) while supplies last, a savings of $50.

Xbox 360 is just one of three Xbox 360 gaming and entertainment systems Microsoft offers. Microsoft’s Xbox 360 Arcade, which comes with a 256MB memory unit and five Xbox LIVE Arcade games, is a value for the whole family for $279 (U.S.) (ERP), and the premium Xbox 360 Elite console is available with a 120GB hard drive for $449 (U.S.) (ERP).

These consoles are far too expensive. The Xbox 360 Arcade should cost just $250 to match the Wii. The mid-line Xbox 360, with a 60 GB drive, should cost $300. And the Xbox 360 Elite should cost $375. Why is it OK to charge too much for something that is selling poorly? Microsoft is losing ground to Sony now, for crying out loud. It's time to get aggressive.

Discuss this Article 13

meason
on Jul 13, 2008
100% agree paul, Though I think they should just kill the arcade. I never have seen one move off the shelf. The one person I know that got one was only to replace after their 6th RROD. I think if they cut the price the first thing to go will the the red led's in the ring of light. also not sure If I would not consider dumping the elite, its not that elite anymore now that all have HDMI and I wonder how many really fill 120GB drives.....
techdribble
on Jul 13, 2008
My xbox recently died and after some issues with support replaced it with a PS3 and couldn't be happier although I do need to find a good wireless steering wheel for the PS3. On the downside I now have xbox360 bits everywhere. Time to hit the auction sites.
beaker
on Jul 13, 2008
they have to get aggressive... their box is fantastic (IMO)... the price is way too high.. the PS3 is growing daily (all my friends are buying them b/c of the BlueRay)
yert
on Jul 13, 2008
Back in 2002, when sensing the threat of the original Xbox, Sony cut the price of the PS2 by a third. Why can't Microsoft do that? Do they somehow feel that the Xbox 360 has something that will make it shoot past the competition? Because I don't think games alone are enough in this case.
Ocean
on Jul 13, 2008
They've already lost the war this generation; they aren't interested in losing more money in a futile attempt to catch up. >>The Xbox 360 Arcade should cost just $250 to match the Wii. The mid-line Xbox 360, with a 60 GB drive, should cost $300. And the Xbox 360 Elite should cost $375.<< Where are you getting these numbers from?
Ocean
on Jul 13, 2008
http://blog.wired.com/games/2008/07/will-sony-and-m.html >>The motion controller alone doesn't explain Wii's wildfire success. The console's low $250 price point is also a factor in Nintendo's dominance, and that's something competitors aren't likely to be able to match with their high-definition consoles anytime soon. -- Nintendo's current momentum in the hardware wars -- bolstered by hit releases like Wii Fit, which abandons the motion controller for a Balance Board controller that measures the gamer's weight and center of gravity -- means that it's probably too late for its rivals to catch up. But Sony or Microsoft could get an early jump on the next generation of motion-sensing controllers by introducing a technologically superior product at E3 that gives game developers more freedom to design more interesting games.<<
Snakedoctor1
on Jul 13, 2008
Price with most mass consumer products if the #1 determining factor overall. The Wii, wins in that category. The 360 is going to loose. Sony is catching up fast. The PS3 hardware is so nice in comparison. Its super quiet compared to the 360 (try watching a movie that is slow and quiet in parts on the 360) its much cooler as well and does not fail. A 320gig hardrive for the PS3 can be had for $159 on www.newegg.com. Its users replaceable and takes about 10min to do. Rip your DVD collection or part of it to that hard drive and no more DVD's to deal with. Its got BR, and its getting 80% of the same games the 360 gets at the same time now. PSN just put out an update that gave you in-game communication like Live, and PSN is FREE!! Oh and wireless in built in. Live is still better overall, if you really use the features. Plus the 360 controller just feels way better.
johnpapola
on Jul 13, 2008
I really love my 360 and Live is awesome... but every single person I know with a 360 has had it fail. Some twice. That is beyond all reason and accountability. Mine hasn't failed only because I play it so little (having a 3 year old will do that to your game time). The fact that they didn't immediately do a ground-up redesign and put out a quiet, reliable box will probably be the death of this generation's effort to close the gap with Sony. Even worse, though... it puts in all of our minds he fear of being screwed by first-gen hardware releases from Microsoft. They really just put a gun to the head of their brand and pulled the trigger. Sad.
26mb
on Jul 14, 2008
I have no issue with the price if they would just put out one with cooler internals and a quiet DVD drive. When is this supposed to happen? I read somewhere a while back they were moving the graphics to a 65nm process and this would help with the heat - I was hoping this would reduce the price as well but this doesn't seem to be the case.
Ocean
on Jul 14, 2008
It's impossible for MS to get the 'buzz' that the Wii has.
Ocean
on Jul 14, 2008
Price cut: >>Dropping the price of the primary Xbox 360 permanently could have dragged financially on the Entertainment and Devices Division at a time when it's trying to become consistently profitable -- not just on a quarterly basis, but annually.<< http://blog.seattlepi.nwsource.com/microsoft/archives/143357.asp?source=rss
pmcgrath
on Jul 14, 2008
My 360 RROD’d this weekend. :-( My boys were pretty upset about it. At least the old xbox is still functioning. I told my wife that I was actually relieved it happened now and not after the extended warranty expired. Hopefully I'll get one that’s a little more durable. It's kind of like owning an old sports car. You love the thing, but you know it's going to break. Unfortunately, you can't fix it yourself. Back on topic, I agree with the price comments, Wii wins on price. It’s the cheapest of the consoles, fun to play, and you can’t really go wrong getting one. Most real gamers have already purchased either a PS3 or a 360, so the initial marked is used up. Now you’re mostly looking at people getting a second system. In this case it’s all about price
DarkSages
on Jul 14, 2008
Elite - The hard drive size is nice if they had actually move to the original concept for it of the xbox being a digital tv receiver and recorder. But what happen to that stuff don't know. So the only real reason to buy is if you must have a black xbox. Not worth the price. Mid-line This one is perfect all you need to play i have two of these Arcade- This one is the one that should have a price brake or at least include the Wii like remote and features at the same price. I did buy two of these because they do have HDMI and I use them as extenders to my Media center pc. This works great and if I need a hard drive I just take it off from one in another room. I'm sorry but the playstation to me is no competition because it does not work with media center. I do have a Wii and I got to tell you it is a good console for the price, but the games suck. Only a small selection are good, and no media center so I would not buy more than one and if you think about it it is actually more expensive with the extra accessories. The parental controls are great I'll give you that.

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