Microsoft denies Xbox 360 price cut as PS3 tops Amazon sales

Stan Beer
Wednesday, 11 July 2007 17:10

Opinion and Analysis

The news that Microsoft is not going to drop the price of the Xbox 360 in response to yesterday's US$100 PS3 price cut is not really a surprise, though many analysts predicted a US$50 drop for the premium 20GB model. Microsoft probably does not believe a price cut would have any effect on sales, given the still considerably more expensive 60GB Playstation 3 is now the top selling video games product on Amazon.

In fact it could be argued that the widely available Xbox 360 premium at US$399 is the cheapest nextgen console on sale in the US at the moment. Yes, the Wii is listed at US$249 but try to find one right now at that price. A quick check of Walmart, Best Buy and Target sites and of course Amazon tells quite an interesting story. The Wii is either listed as out of stock or is available at premium prices.

On Amazon, the top five selling video games as this is being written are: 1. PS3 (60GB) US$499 from Amazon including shipping; 2. PS3 Blu-ray remote US$24.99; 3. PS3 wireless controller US$39.99; 4. The Darkness (Xbox 360); 5. Wii (US$400 plus including shipping from third party suppliers ). At number 15 is the Xbox 360 (20GB) which can be had for US$399 from Amazon including shipping.

The Wii is in such short supply that it's selling at a premium to the recommended retail price, yet on Amazon it is being outsold by PS3 and its two most popular accessories, as well as the Xbox 360 version of the recently released action game The Darkness.

So obviously the PS3 price cut has worked, given that it's now the best selling video games item on Amazon. In addition, there appears to be a lot of interest in using the PS3 as a Blu-ray player given that the Blu-ray remote is the second best selling item. As for the Wii, even at US$400 plus it is still a hot seller but not quite as hot as the PS3 at US$499. Thus, in real terms the Xbox 360 is actually the cheapest available yet worst selling nextgen console in the US right now.

The item of information above that would probably most interest Microsoft is the fact that The Darkness game, which is also available on PS3, is selling so well on Xbox 360 but not on PS3 (yet). Given that there are far more Xbox 360 than PS3 consoles in US homes, this is not surprising.

However, it does show how hungry the market is for new titles. Thus, Microsoft probably believes that the release of Halo 3 in September is what the market is looking for not price cuts. That is no doubt true for existing Xbox 360 owners but the question is will Halo 3 be enough to attract new Xbox 360 buyers?

Perhaps the price cut that market expected today is being held over until September. Meanwhile, racked with Xbox 360 hardware failure issues, Microsoft is prepared to spend more than US$1 billion to keep as many of its Xbox 360 customers up and running as possible in preparation for its blockbuster Halo 3 release.