Microsoft to cut price and create Xbox Three-Six-Wii?

by Alex Zaharov-Reutt

Sunday, 10 June 2007

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So, with price cuts mooted for the Xbox 360 and the PS3 in the media for some months, someone has to move first, and it might be Microsoft. David Hufford said in the Bloomberg interview that “We are well aware that the sweet spot of the market is really 199 bucks [US $]. When mom walks into the store and sees she can get a [Wii] with a game for US $250, she sees it as a US $300 value. They've done a good job”.

So, does this mean that the ‘Core’ edition of the Xbox 360, the one without a hard drive, might become available for US $199, perhaps with a game thrown in, a couple of months before Christmas?

This is now the global gaming industry speculation. My own prediction is not so surprising – this Christmas/holiday season will see a swag of new game titles for the PS3, Xbox 360 and the Wii.

All three games console manufacturers, along with the games companies themselves, are all wanting to sell as many units as possible, to profit from the biggest sales period of the year.

All three want to prove a point, and burst in 2008 in the strongest position possible to entice games companies to develop ever more games for their system. The platform with the most users usually gets the most games, and more games mean more users, which means more games, as the cycle goes.

Of course, everyone always looks for a definitive winner, but this time might be different. All three consoles are powerful machines in their own right, offering unique advantages that the others do not.

Families with children of different ages could conceivable own all three platforms – there certainly are enough TV screens in households these days to accommodate all the devices we want to plug into them.

If a three-way 33% split (or something relatively close it to) appears, then the winner will be the system that sells the most games, as this brings in the most profit. Both Microsoft and Sony are losing money on each console sold, hoping to make it up with games sales, making the need for new, popular, successful and profitable games that much more urgent.

Nintendo, on the other hand, has made money on every console sold since day one. Given Nintendo’s success, Microsoft and Sony can’t sit still. They’ll hold onto current price points until the last minute – 2 or maybe 3 months before Christmas – before an all out mega-games console war erupts at the retail level.

New games, new bundles, cheaper prices, more online features – whatever can be pulled out of the hat this holiday season to boost sales as much as possible, will be. How 2008 and beyond will turn out depends on it.

Will Microsoft cut the price of the Xbox 360? Given what we’ve been told from Microsoft direct, it would seem to be a given, and while we don’t have a precise date it would seem to be at least 3 or 4 months away.

Expect a range of family friendly titles from Microsoft to counter the offerings from the Wii – and you can probably expect the same from Sony, who have also seen the success of the Wii, and have their own motion sensing system to boot.

No doubt Sony would have read the Bloomberg interview with great interest, as would have Nintendo, who are likewise working with developers more than ever before to fight off their newly savvy competiton.

The golden age of gaming may not end up as golden, profit-wise, as the manufacturers wanted for themselves, but for gamers, gaming’s glow is glowing brighter than ever!
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