Manufacturing costs for Microsoft's Xbox 360 video-game console have been falling faster than expected, the company disclosed last week. Even so, it looks like gamers will need to wait awhile for a price cut.
One reason is that Microsoft continues to lose money on the Xbox 360 -- albeit to a lesser degree than it has in the past. But more notably, the Redmond company's game console is already positioned to have a price advantage over Sony's PlayStation 3 when the competing machine is launched next month.
Versions of Microsoft's console sell for $300 and $400, compared with the announced prices of $500 and $600 for the PlayStation 3. In addition, Sony has said it won't be able to supply as many of its new consoles initially as it hoped.
A Microsoft spokesman said last week that the company has "no plans to adjust the price of the Xbox 360 this year."
Unless the company alters course, that would rule out a price reduction for the upcoming holiday shopping season.
"They'll hold off dropping the price as long as they possibly can," said Matt Rosoff, analyst at independent research firm Directions on Microsoft.