Rumor: XBox 360 $100 Price Cut

[bapenguin]

While I don't see this as anything more than Microsoft streamlining the manufacturing process, the DigiTimes (http://www.digitimes.com/systems/a20060726A1001.html) sees it as MS preparing for a price cut.Microsoft, to prepare for the price cut, has negotiated reduced production costs for the Xbox 360 with Taiwan-based manufacturing partners, stated the sources. The manufacturers estimate that the total production cost can be reduced by 15-20% due to diminishing costs for most components along with increasing production scales and decreasing defect rates, the sources pointed out.

No way. Most likely this is just to reduce the cost to MS on the 360, this way they won't be losing as much money per box as before.

[Serapth]

Wow... you really gotta read between the lines to come up with 100$ price cut. IMHO, crock of shit.

[Savok]

MS won't be dropping the price until next year. At least they better not considering I just got one.

[Kelegacy]

MS won't be dropping the price until next year. At least they better not considering I just got one.
I'm with ya! Let those other idjits chew on the same price we all had to endure this year. Besides, the 360 is still 100 bucks cheaper than the PS3.

[Goronmon]

I'm still voting for a game bundled with the system for the same price, though a price drop isn't completely out of the question.

Either way, we won't know about it until it actually happens, since it would be stupid for MS to release any info like this ahead of time.

[Serapth]

I'm still voting for a game bundled with the system for the same price, though a price drop isn't completely out of the question.

Either way, we won't know about it until it actually happens, since it would be stupid for MS to release any info like this ahead of time.


That was leaked earlier this week... that they were going to bundle PGR3 in with the 360 over the holidays, along with 3 months free live gold and 1200 ( or 1500?) marketplace points.

Pretty good deal actually... you could end up with 1 commerical game, 2 casual games and a system, still for 100$ less then the cheapest PS3.

[rjcc]

I think a game bundle (pgr3) is about the safest bet in the world. They're not gonna drop the price until at least spring 07 tho, probably E3. they're still saying they want to be profitable by the end of march next year, they can't do it w/ a price drop.

[rjcc]

That was leaked earlier this week... that they were going to bundle PGR3 in with the 360 over the holidays, along with 3 months free live gold and 1200 ( or 1500?) marketplace points.

Pretty good deal actually... you could end up with 1 commerical game, 2 casual games and a system, still for 100$ less then the cheapest PS3.

and w/ all the demos (just the ones out now (fnr3, GRAW, lost planet, table tennis, doa4 etc.) and all the ones that will be coming out by the holidays, shoot, you could go months without buying more than a couple games.

[Stormwatcher]

They don't need to drop the price, it would be quite unwise at this moment. It would smell like "fear"... they MUST keep the current price point.

[bean19]

They've already said that they won't drop the price for the Fall. They don't need to. The units shipped are still selling nearly as quickly as they can make them.

Plus, they already beat their main competitor in price by a 50% margin (not that Nintendo won't do well or isn't relevant - it's just that buying a Wii doesn't mean people won't buy a 360 or a PS3, where as the same is not necessarily true fo those systems).

[bean19]

They don't need to drop the price, it would be quite unwise at this moment. It would smell like "fear"... they MUST keep the current price point.

lol.

So wrong, but I'd love to read a paper written on this premise in a business course.

Do you honestly think that corporations operate like face-concerned macho jock-types?

[EvilBob46]

Just because MS says they don't have plans for a price cut doesn't mean there's not going to be one. It would be stupid for a company to make the announcment now because that would mean months of lost sales as people delay their purchases until the price drop.

My guess: There will be a price cut of a different sort, in that hey're going to phase out the existing core model and replace it with a premium model for $299 instead, come this Christmas. Call it a gut feeling of mine.

[Guy Mariano]

Highly unlikely. This breaks it down pretty good although it's an analyst

http://www.next-gen.biz/index.php?option=com_content&task=view&id=3515&Itemid=2

Pachter noted that Microsoft brass has informed the Xbox division that it must turn a profit or at least break even in fiscal 2007, which ends June 30 next year.

“I think that the likelihood of an Xbox 360 price cut this calendar year is extremely low.”He explained, “That means that price cuts on the Xbox 360 will come only if the box costs less to produce, ship, and market than the wholesale price. Our best guess is that the box currently costs around $400 - 450 to produce, and it's likely that the company can get that down to below $400 later this year.“

Pachter continued, “The retail margin is around $10 - 15 per box, so the wholesale price of the $399 SKU is around $385 - 390. In other words, Microsoft doesn't make any money on the hardware.”

He did concede that a price drop prior to the PS3 release is “possible,” but it would put the Xbox division in an even tougher position in terms of turning a profit in fiscal 2007. Pachter exhibited the potential challenge with some fundamental math.

“…The company plans to sell 10 million Xbox 360 hardware units over the next year, so a price cut in November would likely impact 8 million of these, costing the company $800 million. At a software royalty profit of around $10 per unit, the company would have to sell 80 million incremental software units in order to be in the same place as without a price cut.“

He added, “Our model has Microsoft selling only around 60 million total units of software this fiscal year, so in order to break even on a price cut, they would have to sell 140 million pieces of software. Remember, we're talking about profitability for FY:07, not over the life of the 360.”

Pachter also said that a software bundle from Microsoft would be the more likely route the company would take in order to create perceived value among consumers, and avoid further hardware losses.

Next-Gen reported earlier this week on an expected Project Gotham 3 Xbox 360 bundle for the holidays.

Pacther summed up his thoughts, saying, “I think that the likelihood of an Xbox 360 price cut this calendar year is extremely low.”

[Reanimated]

The cost reductions are coming now in preparation for a SPRING price drop. Count on it.

[thenefariousone]

Indeed. It's not a $100 Price cut, it's a $100 manufacturing cost cut, as 15-20% of their manufacturing costs is just about $100.

As Microsoft intends on making money this time, so those savings won't be blindly and completely passed on to consumers.

Especially not in the first year.

The various aforementioned bundles would give consumers something extra, while the lower costs put the console on the road to profitability.


While I don't see this as anything more than Microsoft streamlining the manufacturing process, the DigiTimes (http://www.digitimes.com/systems/a20060726A1001.html) sees it as MS preparing for a price cut.

No way. Most likely this is just to reduce the cost to MS on the 360, this way they won't be losing as much money per box as before.

[roboninja]

I just wish they would stop ripping us Canucks off. When the exchange rate against the american dollar was so bad, we had to deal with the higher prices ($199 consoles being $299 in CDN$). Now, with the better exchange rate....we get the same damn prices :( The $399 Xbox goes for $499 CDN, when the exchange rate tells us $399 USD = 451.01 CDN; this is a price drop I would expect.

[Sinistar]

If MS were to drop the 360 price by $100 that would probably mean a measure of defeat by them. That sort of reduction would really undermine the percieved value of their products moving forward.

On a side note:
I think it's time to allow for some added functionality here at EvAv. I really enjoy the "[Reported by Diggers as Possibly Inaccurate]" as seen over at Digg.com (when rumors are posted as fact and then the diggers call them out). I'm all for speculation but stories like this go pretty far into tarnishing the strong community here at EA.

[bapenguin]

If MS were to drop the 360 price by $100 that would probably mean a measure of defeat by them. That sort of reduction would really undermine the percieved value of their products moving forward.

On a side note:
I think it's time to allow for some added functionality here at EvAv. I really enjoy the "[Reported by Diggers as Possibly Inaccurate]" as seen over at Digg.com (when rumors are posted as fact and then the diggers call them out). I'm all for speculation but stories like this go pretty far into tarnishing the strong community here at EA.

That was why I marked it with a RUMOR prefix. The DigiTimes isn't some no-name site either. It's not like I linked to a forum post. The rumor has to carry SOME weight, no matter how little it is.

[Venkman]

A $100 price drop would turn it into an instant buy for me.

[The Letter 3]

A $100 price drop would turn it into an instant buy for me.
But MS is hoping that by having a price point of $100 less than the PS3, they will be the instant buy this holiday season. No sense in dropping the price over christmas - that'll likely happen in the spring when they need some momentum going into the summer slowdown.

[Frogleg Special]

If MS wants to nuke the PS3, then $100 price cut in the holiday is a surefire way. It'll sure piss off people who have bought them full price. But the fact is, people have already bought the Xbox 360. Anger and disgust won't push people to go buying the alternative or boycott Xbox Live.

I say it's still unlikely. $50 or any other game bundle deals is a possibility.

[needoptic]

If MS wants to nuke the PS3.

Why is everyone focusing on one company "nuking" the other ? These businesses are out there to make a profit and there's plenty of room for both to succeed.

Microsoft thinks they are in a good price position for this holiday season, and they will stay there. There's no need for them to "totally pwn" Sony, risking more loss with the decreased price of their own console.

[Serapth]

Why is everyone focusing on one company "nuking" the other ? These businesses are out there to make a profit and there's plenty of room for both to succeed.

Microsoft thinks they are in a good price position for this holiday season, and they will stay there. There's no need for them to "totally pwn" Sony, risking more loss with the decreased price of their own console.


Mostly because Sony is talking about how its going to beat XBox, and MS is talking about how when they hit 10 million they win.

Trickle down effect. Frankly companies can be childish too....

[needoptic]

Mostly because Sony is talking about how its going to beat XBox, and MS is talking about how when they hit 10 million they win.

Trickle down effect. Frankly companies can be childish too....

I know. They're trying to convince the consumer that it's their console that's the "ONE!" to have.

Were they both priced at $300 - $400, people could own both.

[Soap]

From what I remember during every system's price is that the price is usually goes down by $50 increments, NEVER $100. If memory serves me correct (cue Iron Chef theme music), the Xbox/PS2 went from $299 to $249 to $199. After $199 I can't remember what it dropped to next.

[Chameleo]

From what I remember during every system's price is that the price is usually goes down by $50 increments, NEVER $100. If memory serves me correct (cue Iron Chef theme music), the Xbox/PS2 went from $299 to $249 to $199. After $199 I can't remember what it dropped to next.

$179?
u have entered is too short. Please lengthen your message to at least 10 characters.

[Evil_SPanKY]

Yeah, I would love to see a price drop, but there is really no reason to. Sony's prices are going to be way higher at release per system, so the best MS will do IMO is a game bundle for the same current price structure.

[RMan]

Yea, I'd say until PS3 shortages are over, a price cut isn't real necessary. I don’t see how they can expect to turn a profit or break even in 07 though, it’s pretty unlikely even with their hardware breakdown which doesn’t include R&D and marketing costs (marketing is obviously huge). To make the product an eventual success, they’ll have to continue to burn money, and the product will take much longer than 07 to be a financial success.

[Royal Fool]

Microsoft will stick with the current pricing until next year, and even if the PS3 drops by $100 during christmas 2007, Microsoft can or will have matched them, either with a clean cut or a new bundle. Nice advantage to have there...

On another note, Microsoft should really be more aggressive with their bundles. That FIFA 2006 one wasn't impressive, the PGR3 one will be better. And Gears of War.

[sTubbs]

The only way MS would have dropped the price is if the PS3 was selling for the same. With the PS3 200 dollars more than the 360 there is simply no point. Throw in a game be done with it.

[Kelegacy]

The only way MS would have dropped the price is if the PS3 was selling for the same. With the PS3 200 dollars more than the 360 there is simply no point. Throw in a game be done with it.
The PS3 is 100 dollars more than the 360, not 200.

[Mr.Condescension]

The PS3 is 100 dollars more than the 360, not 200.

You are now officially my hero. :D

[Heretic Machine]

The bundle idea sounds fine to me, but they should really consider at least two different bundles. Not everyone wants a racing game. How about a PGR bundle, and a Kameo bundle? Or add a third with a PD0 bundle? Then you have all of the 360's big three big bases covered: sports/competition; action/adventure; FPS.

[Heretic Machine]

The PS3 is 100 dollars more than the 360, not 200.

PS3 Premium: $600
360 Premium: $400

PS3 Base: $500
360 Core: $300

Price difference: $200

[Mr.Condescension]

PS3 Premium: $600
360 Premium: $400

PS3 Base: $500
360 Core: $300

Price difference: $200

Sure, if you ignore the fact that the Base PS3 model has every hardware feature the Premium 360 has at a $100 difference in price.

Really it looks like this:

Xbox Core: $300

Xbox Premium: $400
PS3 Base: $500

PS3 Premium: $600

[Magnanimous Gnome]

My interest in getting a 360 is finally starting to grow, but there's no way I'll get one until the Premium is $300 and the prices of the accesories come out of the stratosphere.

[Kadoo]

I agree Magnanimous Gnome
$50 bucks for a controller is pretty steep if you want to setup for multi-player action
The PS3 supports 7 controllers that would be about $300 you could buy another system or a lot of weed for that

[bean19]

The PS3 is 100 dollars more than the 360, not 200.

Whee! Let's rehash the differences between the two PS3 models and the two 360 models again!!!

This is a gamer forum. . . can't we just assume that the majority of people here will buy the $400 360 with the HD and the $600 PS3 with HDMI?

[Deathbane27]

The PS3 supports 7 controllers

Welcome to LAST YEAR. :)

4 controllers.