Xbox 360 price cut in Europe: price war begins

Stan Beer
Monday, 20 August 2007 15:30

Your IT - Entertainment

In an effort to boost flagging sales in the wake of a perfect storm of issues, Microsoft has followed up price cuts to its Xbox 360 range in the US, with cuts in Europe. According to a Reuters report Microsoft will shave 50 euros off the price of its most popular 20GB Xbox 360 console from August 24.

The European price cut and similar cut in Australia last week make a mockery of indications from Microsoft that there would be no price drops in Europe. Microsoft seems to be following Sony's strategy of simply telling the media one thing (no plans for a price cut) and then literally the next day going ahead and doing the exact opposite.

The fact is, however, that Microsoft had little option but to go into price slashing mode. Faced with serious hardware reliability issues, resurgent PlayStation 3 sales after Sony aggressively slashed the console's price in the US by $100, and a remarkable continuing roll at the check-out counter by Nintendo's Wii, Microsoft had its back to the wall.

The good news for Xbox 360 is that the release of Halo 3, the latest installment in the phenomenally successful Microsoft games franchise, is just around the corner on September 25.

As 2007 has shown, the games business is all about software and exclusive titles like Halo 3 are few and far between this year. The blogosphere is well and truly buzzing with irate Xbox 360 owners who have suffered the "red ring of death" hardware failure but who also would never consider abandoning their Microsoft console because it's the only platform that will have Halo 3.

Some market watchers have predicted that July's PS3 price cut in the US will result in the Sony console passing Xbox 360 sales for the first time in that month. However, the same analysts believe that Xbox 360 will bounce back strongly as a result of the current price cut and the release of Halo 3.

The pressure is now back on Sony, which has not cut the price of its console outside of North America.