Why is Microsoft Dropping the Xbox 360 Price so Fast?

The Xbox 360 is on track to have 2 million sales in the UK by next week, according to industry number crunchers at Chart-Track, as Microsoft continues its Baked Beans strategy of slashing the price in quick succession.

Microsoft's 360 strategy has become more than apparent since the most basic model, the Arcade rejig of the old basic package, is being sold for less than the Nintendo Wii; one of the main selling points of which had been its low cost for mass appeal.

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sonarus4514d ago (Edited 4514d ago )

how are they dropping it "so fast" ???
They are obviously slicing prices to stay competitive. Sony too will likely be looking to slash prices to stay competitive as well. It would be a shame to lose that NA lead they have held on to so tightly all yr

Breakfast4514d ago

LOL...after 2 years on the market

Monchichi0254514d ago

Agreed... How is this dropping the price "So fast." In reality, this is the first true price drop as all others have really been system modifications. And it has been over 2 years already.

If anybody has been dropping the price to stay competitive it's Sony. You all recall the price drop in Japan even before the system came out! LOL

But in all, MS had played the business model as all other systems have done before. Lower prices to increase sales.

IntelligentAj4514d ago

2 years is fast? Is this guy serious? They're also doing it to steal some of the momentum from the PS3, which makes all the business sense in the world.

Cwalat4514d ago

this is the perfect time to slash the price a bit...
its now that they are starting to lose alot of ground so this is perfect time to do this... but i gotta say, it hasn't helped them that much... PS3 still outsells it everywhere...

The Killer4514d ago (Edited 4514d ago )

MS is trying to compete with sony in europe, and as everyone see, they r losing market share very fast, so i guess its not a surprise to cut the prices, but what they keep forgetting is that cutting the prices doesnt make the console from unwanted to wanted, only games makes that, and 360 didnt have any special exclusive games when the price cut arrived!

dont forget that when last year ps3 cut the price by 100$ in USA it helped them only for a month ans still 360 sold more!

and while the format war is over and ps3 can be seen as the best blue ray player and the successor of the ps2, it will automatically generate more interest than 360!

also i believe they cut the prices so that when GTA4 comes they can say we have the cheaper console to play the complete GTA4, but they keep forgetting that no body cares about the DLC except the hardcore, and due to that fact initially 360 sales will be more than ps3 but by time pass, more and more casuals will buy the ps3, and when MGS4 comes with another price drop, expect ps3 sales and GTA4,MGS4 in summer to be still very high!!

ps3 dont need a price cut now, they need it before MGS4 or summer, and when they do it they need to make a big price drop like 100EU-100$-60GBP.

when that happened the beginning of putting the nails in the coffin of 360 will start, i mean really the nails in the 360 coffin, not like nails in ps3 coffin because of halo 3.

thats what i think, or believe so!

solar4514d ago

@ Killer

"MS is trying to compete with sony in europe, and as everyone see, they r losing market share very fast, so i guess its not a surprise to cut the prices, but what they keep forgetting is that cutting the prices doesnt make the console from unwanted to wanted, only games makes that"

good point. i think one issue also to think about is PC gaming in europe. its pretty big. if the great games for 360 are also hitting the PC market...why buy the console? its one of the reasons keeping me from buying a 360. along with that other lil problem...i think you know what it is :P

+ Show (3) more repliesLast reply 4514d ago
BeaArthur4514d ago

With the Sony fanbase being what it is and with the PS3 picking up steam, they are trying to make the console more appealing by dropping the price.

Massacre4514d ago

I'd like to know this as well..

decapitator4514d ago

Who really knows ? I guess they are the only ones who know the motive behind that.

Fishy Fingers4514d ago (Edited 4514d ago )

To increase falling sales? Isn't that the only reason a company would reduce their prices?

If the 360 was out selling the PS3 2:1 do you think this would of still happened.

I guess the following few months will show if it has worked or not, I'd be surprised if it doesn't out sell the PS3 comfortably, but then, this is only my guess work, it holds no weight so please don't get angry at me :)

But if you have a difference of opinion, please elaborate, I enjoy others insight.

decapitator4514d ago

*clap clap*

You sir raised a good point. I never really thought about it like that. I just thought, they wanted to stay competitive.

butterfinger4514d ago

if this was perhaps a preemptive strike by Microsoft to counter a rumored upcoming PS3 price cut.

Blademask4514d ago

do you mean decrease falling sales?

decapitator4514d ago

I actuatually I was thinking about the rumored PS3/GTAIV bundle that might be hitting real soon or a month after GTAIV. That could also be part of it.

Besides Gaiden 2,Fable 2 and Gears 2, and Banjo, there aren't that many system sellers unveiled for the the 360.

Fishy Fingers4514d ago (Edited 4514d ago )

Do you have any further information on the GTA pack? I have multiple friends waiting to pick up their new PS3 but they dont want the 40gb model (understandable).

butterfinger4514d ago

@ 5.3 - I think he meant to increase sales, because they are currently losing some ground.

@ 5.4 - I agree. I think the PS3/GTAIV bundle will be huge for Sony. That really might trump a price drop if it ends up coming out like the rumors have said.

@ 5.5 - There has been a lot of rumors that Sony is going to have a PS3 bundle including GTAIV and a DS3, but I believe they have been saying it will be a 40GB system. You could tell your friends that the PS3 HDD is very easy to upgrade and you can get it up to 320GB or so in just a few simple steps, and not for too much extra money ($120-$200 on eBay).

TheExecutive4514d ago

Yes they are trying to combat loss of sales with a price drop, but mark my words it will never work. People in the gaming industry put too much weight on the price of a 'gaming console'.

The problem with this is that there is a lot more that goes into the purchase of a console then just the price. I have been trying to pound perceived value into peoples heads on this site. Perceived value is what the actual consumer thinks its worth in comparison to other gaming consoles on the market.

Right now since the perceived value of the ps3 is skyrocketing for numerous reasons (bluray, games on the horizon) it makes the 360 look like less of a deal. especially when you consider that the ELITE is still around the same price as the 40 gb.

However, we must also consider that the ps3 has a dual functionality. Both functions, bluray and games, are excelling dramatically this year. So, as the perceived value of the ps3 goes up it makes the 360 look like less of a deal.

The reason why MS lowered its price is simply because they know that the tide is turning and they are trying to take back some of the market share. It will never work. As we have seen for the last 2-3 weeks the price drop in EU was too little too late. Even with the drop the ps3 is still outselling the 360. When the rumored bundle for both GTA and MGS come out its lights out. Seeing that the price drop has done little to nothing in EU tells us 2 possible stories:

1.) That the 360 is not at its ideal price point yet

1a.) if this is the case MS is going to have to scratch the 360. They cannot afford to keep dropping prices and make any kind of profit on the 360. they might as well move onto the next gen. Of course when they do that they lose money for another couple of years. They would be in a lose lose in this scenario.

2.) They have reached their market saturation point in EU. They have sold the consoles they were going to and now they have to move on. once again this doesnt look good for MS.

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