Time for an Xbox 360 price cut

Stan Beer
Tuesday, 05 December 2006 15:59

Opinion and Analysis

While Microsoft's Robbie Bach talks up sales of Xbox 360, Nintendo sold 1 million Wii consoles in just 10 days. Judging by the activity on eBay and muggings in US streets, Sony may have achieved similar results if it had the stock on hand. For the past year, Xbox 360 has had no competition, yet it has struggled in Japan and has yet to reach 10 million units sold. Is it time for a price cut?

Let's face it. Microsoft couldn't make an impact in Japan, when its only competition was the previous generation of Sony console, PS2, and Nintendo's less than wildly successful Game Cube (yes more than 20 million were sold I know). So Xbox 360 is not going to tear the house down in the land of the rising sun now that the home grown Wii and PS3 have arrived.

It's certainly true that Xbox 360 has done much better outside of the intensely parochial games market of Japan. However, after one year of no competition in its class, it still has some work to do to reach 10 million units sold and is still being outsold by the less feature-rich but considerably cheaper PS2.

Wii and PS3 have literally exploded onto the streets of the US and the Xbox 360, despite being a very good new generation machine, now seems like yesterday's console. Wii is about to hit markets outside the US, followed by PS3 in in March.

While the effect on Xbox 360 sales can't be predicted with certainty, the chances are that well-exposed Xbox 360 will seem old hat compared to the newer consoles.

The obvious conclusion is that Microsoft, which already makes a loss on Xbox 360 hardware is going to have to drop prices and make an even bigger loss to stay in the game. Look for significant Xbox 360 price cuts and games bundling in the not too distant future.