360 Price Drop to Coincide with Halo 3 Launch?

[bapenguin]

Next-Gen.biz (http://www.next-gen.biz/index.php?option=com_content&task=view&id=5912&Itemid=2) has a few select quotes from Microsoft regarding their need to expand the consumer base. To do this, Microsoft realizes they need to drop the price to the sweet spot (http://www.gamesindustry.biz/content_page.php?aid=25625) of $199. This of course brought in everyone's favorite people in the industry, analysts, to chime in.Software analyst Bellini believes that if Microsoft’s gaming division is to begin to turn a profit and emulate the success of Nintendo’s Wii, the company will need to cut the price of the Xbox 360 in order to boost game sales. She says this could happen as early as September.

``If they really are going to have a good Christmas games lineup, then they just have to have the largest number of boxes out there so that they sell the largest number of games,'' said Bellini.

A price drop to coincide with the Halo 3 launch? Yeah..that'll move units.

[Itchyeyes]

The 360 has been out for almost 2 years now, so a price drop is about due for the system. I don't know if I'm convinced that it will happen before Christmas though. I suspect that Halo 3 will manage to move a lot of units on it's own even without the aide of a price drop, not to mention sales will increase significantly in Nov and Dec because of Christmas. I doubt Microsoft wants any overlap between the increased sales from Halo 3, the price drop, and the Christmas season and would want to plan their strategy to maximize the benefits of each one. While this analysis makes sense on the surface, I think sometime next spring is a more likely time for Microsoft to drop the price.

[Vandenh]

Almost guaranteed that 360 will see a price cut this XMas. It makes sense on all levels.

[ldi222]

Frankly I dont really care if they lower the price or not, I already own one. However it would be nice to see their 120 gig hard drive sell for less than the stupid high price it currently retails for along with some more sane 400 points for additional content rather than the 800. Its going to be a slap in the face when new SR content retails @ 800 forcing me to have then paid $70 for a multiplayer only game.

[Uniqueusername]

If MS was willing to drop the price on their own, I suspect they would have done it after christmas. If the 360 was the cheapest console, it would have taken some of the wind out of the Wii and burried the PS3. Instead, MS has given the competition some breathing room.

I've been assuming that MS did this simply because they wanted the extra cash from a Halo 3 release with a full price 360. It's going to move a lot of consoles, and if they drop price now they are turning down the extra cash...

[roboninja]

If they drop the price, I will probably get one. Not until then however. It has been over 2 years now, and I may be wrong, but don't nearly all consoles have a price drop within their first 2 years? I find it very strange that they did not drop the price when the PS3 and Wii hit. Can you imagine what their sales numbers would have been like if they did, and what a dent it would have put into the sales of both their competitors' consoles?

[Yeti2005]

... I suspect that Halo 3 will manage to move a lot of units on it's own even without the aide of a price drop, not to mention sales will increase significantly in Nov and Dec because of Christmas. I doubt Microsoft wants any overlap between the increased sales from Halo 3, the price drop, and the Christmas season and would want to plan their strategy to maximize the benefits of each one....

I was going to say practically the same thing. MS is going to move units anyway with Halo 3, the Holiday season, and a strong game library. If MS can produce 360 for profit then I'm sure they'll want that time to recoup their early loses before dropping the price. Spring 2008 seems like a good time unless the PS3 or Wii drops their price first.

[Shadowstorm]

Microsoft will drop the price after Christmas, not before. Halo 3 will move systems when it releases September 25th and MS will want maximum sales possible. They will not lower the price to coincide with Halo 3.

[Draft]

Hopefully the price cut coincides with a hardware revision that's not so prone to eating discs, burning alive or imitating a vacuum cleaner, some of the things the current X360 is so fond of doing.

[Mdot23]

I agree with Yeti and Itchy. But I'm thinking that a bigger impact could be had if they drop the price right before GTA IV launches, which will no doubt move units for both the 360 and the PS3. If the price difference between the 2 systems is that much larger right when GTA drops, it will sway the people buying systems just for that game over to the 360 even more so.

But if the drop doesn't happen before GTA, I'd assume it would come early November, right in time for the rush. I see no point in dropping it before/with Halo 3, since that will move alot of units on it's own without the drop. The second wave in November will make for another bump in Halo sales and hardware sales if they drop it then.

[TheDancinMan]

There's probably going to be a price drop within the next year or so, but it's just a question of when. Dropping the price before the release of Halo 3 would move units, but you know they would still sell like hotcakes with Halo 3 finally out. Same thing goes for the Holiday season, they would still sell very well, but, would they cut the price before the holiday season to encourage people to buy, or, wait out the holidays to make a bit more money per unti sold?

[lockwoodx]

I doubt they will drop the price BEFORE halo3, because once kids show thier friends everyone is going to buy a system anyways. Count on more of a holiday sale.

[Telefrog]

If the price dropped to $199 then the only question I would have is will the repair fee drop as well?

[roboninja]

There's probably going to be a price drop within the next year or so, but it's just a question of when. Dropping the price before the release of Halo 3 would move units, but you know they would still sell like hotcakes with Halo 3 finally out. Same thing goes for the Holiday season, they would still sell very well, but, would they cut the price before the holiday season to encourage people to buy, or, wait out the holidays to make a bit more money per unit sold?
See, I get everybody's arguements on this, that Halo 3 and Xmas will push units at the current price, but I find that to be a very short-term strategy. Sure, they may sell more units at a profit (if they truly do make a profit on sales right now). But, how does a console become a true runaway success? Not by making money on console sales, that was never a big part of it, even with a made-for-profit console like the Wii. Where the company truly makes money is with game licensing, which comes from a large install base. The 360 even has an added revenue stream of Live content, which also increases substantially with every unit sold. Sure, MS may double to triple monthly console sales when Halo 3 is released, and during Xmas, but how many could they move if they added in a price drop? They might very well start running into hardware shortages again. And that is a good thing for MS.

Basically, what I am saying is, Halo 3 and the Xmas season will most assuredly make the 360 sell well, but I do not think MS should be happy with just "doing well", they should go for the throat.

[SalaciousPuck]

There will definitely be a price cut. The question is if it really hits the 'sweet spot' when the 360 Core goes to $200. I think most people (rightfully) look at that as a crippled product. For all intents, the price of entry is going to be $300....better, but not as sweet.

[Mdot23]

There will definitely be a price cut. The question is if it really hits the 'sweet spot' when the 360 Core goes to $200. I think most people (rightfully) look at that as a crippled product. For all intents, the price of entry is going to be $300....better, but not as sweet.

If the Core is $200 you can't logically tell me that is a crippled product when the Wii is sitting there looking at you from $250. From a pure hardware and technological standpoint, it pisses on the Wii and would be a steal at $200.

[fitbabits]

If this were to happen (and it's a BIG if), Sony and the PS3 would be dead in the water. I'll again quote Shane Kim from GDC: "We're not in reactive mode. What we do is no longer dependent on what others do. We can do what we like when we like, and we've worked hard to get there."

[Philonious]

If this were to happen (and it's a BIG if), Sony and the PS3 would be dead in the water. I'll again quote Shane Kim from GDC: "We're not in reactive mode. What we do is no longer dependent on what others do. We can do what we like when we like, and we've worked hard to get there."

First, Sony would respond with a price drop, not one as drastic, but then again they don't really need to compete with the core unit. Second, it isn't really a fair comparison because we have no idea how the PS3 will move once games start arriving. A price drop would hurt Sony, but I'm not sure it would be the killing blow you are predicting.

[Uniqueusername]

The question is if it really hits the 'sweet spot' when the 360 Core goes to $200. I think most people (rightfully) look at that as a crippled product.
Bought a Core 6 months ago because it was cheap, and have gotten plenty of use out of it since then. I ended up buying far more games than I intended to. The system hasn't seemed terribly crippled to me... :p

[Roc Ingersol]

Why would they drop the price right when they release a title that has such outrageous demand?

I agree with the general wisdom: a price drop is overdue, and at $200 for the Core, they would start moving a considerable number of units. I just don't think any business-person in their right mind would drop the price right when you know there'll be a huge uptick in demand.

Perhaps that's the real reason for moving Halo3 to September: get the bulk of halo3 sales out of the way, and still have a price drop for Christmas.

[Bydo_Empire]

I don't think a price drop makes all that much sense. Sony has yet to prove they can move systems, and MS already has a massive price advantage. Furthermore, they have a killer fall lineup. I think they'll do a price drop next spring (unless Sony slashes the ps3 price this fall, in which case MS will probably respond).

[Knite]

Honestly, if they drop 100$ in price, I'm almost garunteed to get that 2nd 360 I've been *ahem* asked to purchased.

[Doctor Setebos]

Last year everyone speculated that MS would drop the price at the same time the PS3 hit stores because it made sense.

It didn't happen, did it? I don't see them dropping the price when Halo 3 hits since the people who would buy Halo 3 already have a 360. I see them dropping the price after the holidays, like around March 2008, in an effort to try to drag out the big numbers of the holiday sales just a little bit longer.

[Arphahat]

A $200 price would make my next gen console choice a no-brainer.

[Montolio]

It's just nice to see the Xbox brand in a position to make useful changes i.e. start turning a profit for its division in Microsoft. I knew they'd do much better in this generation, but I had no idea they would do this well. I absolutely didn't expect Sony to stumble this badly and Nintendo, wow just wow, they have been tremendous.

Since we all know it's coming . . . I wonder what the Halo 3 Xbox 360 SKU will go for.

[Taiso]

I think dropping the 360 price with a Halo 3 release would be a fucking stroke of genius. Sony is on the ropes now and you know Bilbo of the Gates People wants to keep them there.

Chaka Zulu said that when you have your enemy defeated, kill him so that he does not come back to harass you later. Or something to that effect. This would really put the screws to Sony, much in the same way that Gears of War came out at just the right time last year.

One way in which you destroy your enemy is to make them irrelevant so that no one is considering them. One way to do this is to give people something else to look at and be excited about.

It would be a thoroughly ruthless move, sort of like stabbing through yourself to kill the enemy behind you.

[drakkarim]

Next-Gen.biz (http://www.next-gen.biz/index.php?option=com_content&task=view&id=5912&Itemid=2) has a few select quotes from Microsoft regarding their need to expand the consumer base. To do this, Microsoft realizes they need to drop the price to the sweet spot (http://www.gamesindustry.biz/content_page.php?aid=25625) of $199. This of course brought in everyone's favorite people in the industry, analysts, to chime in.
A price drop to coincide with the Halo 3 launch? Yeah..that'll move units.

if you want to expand your consumer base, how about lowering the prices of the games?? i would think that the typical consumers sees a console and thinks "299/399 plus 60 for every game...'

unless you're like me and think 'i don't care about the console price, i know i can get all my games for half price used on ebay'.

[vivafletcher]

I'd consider a 360 with a nice price drop, but now that it's been a couple of years...I'm starting to get concerned about the console's life. After seeing what they did with the original X Box, I don't want to have a dead system after just a couple of years. The PS2 still has titles come out for it (God of War, Tomb Raider, popular sports titles) but nothing for the X Box. The PS3 could have a longer life cycle.

[KamaItachi]

I'd consider a 360 with a nice price drop, but now that it's been a couple of years...I'm starting to get concerned about the console's life. After seeing what they did with the original X Box, I don't want to have a dead system after just a couple of years. The PS2 still has titles come out for it (God of War, Tomb Raider, popular sports titles) but nothing for the X Box. The PS3 could have a longer life cycle.

I get what you mean, but even if they stopped making games fo rthe 360 tomorrow, I'd still think of it as a great system. Continued support is good and all, but a solid library of even half a dozen games is all I'd require to think of a console as purchase worthy.

[LilAbner]

This means nothing to me as I already own a 360, but if it'll help the platform I'm all for it. Like ldi222 said, they need to drop some marketplace prices....at least on the older titles.

[Shodan2020]

Why would they drop the price right when they release a title that has such outrageous demand?

So you could move way more units and shut out the competition. (Sony) All those units, mean all the more XBL subscribers as well, Live is where MS makes the real money. Most of the profits they make from the 360 sales, at least right now are going back to pay for the 360. It totally makes sense.

[drakkarim]

I'd consider a 360 with a nice price drop, but now that it's been a couple of years...I'm starting to get concerned about the console's life. After seeing what they did with the original X Box, I don't want to have a dead system after just a couple of years. The PS2 still has titles come out for it (God of War, Tomb Raider, popular sports titles) but nothing for the X Box. The PS3 could have a longer life cycle.

don't waste your time by waiting for price drops, just buy a used one from a reputable buyer on ebay, along with your games.

that way you get a cheap price, and also you get to "stick it to the man" for attempting to overcharge you in the first place.

[zyzyx]

MS need to remain cheaper than the PS3. It'd be silly to do a price drop if Sony don't. They can get away with a Halo 3 bundle.

[Flatpicker]

I don't see a price drop concurrent with Halo 3.
It used to be that price drops would be announced at e3 and implemented in May.
Maybe we will see one for the mid summer of about $50 and another in March 08 of $100 to push more q1 software sales.

[Roc Ingersol]

So you could move way more units and shut out the competition. (Sony)
At $600 Sony shut themselves out. That's the only reason there hasn't already been a price drop. By cutting the $500 SKU Sony's given Microsoft even more breathing room. Microsoft is simply not in danger of losing customers to the PS3 -- not the kind that are waiting around for a price drop.

A price drop at release gets you more sales at release, sure. But if you have a price drop after thanksgiving, you'll get the same total sales in the end. And the people who will buy a 360 for Halo 3 will have bought it at $400.

A price drop before the halo 3 uptick would be called 'leaving money on the table', and Microsoft doesn't do it. Honestly, I'd be surprised if they even drop the price for Christmas. But that's far more plausible than a price drop in September.

Thinking they'd drop the price or bundle halo3 to deliver that knockout punch to the PS3 would be like expecting them to drop the price of Windows and Office to deliver a knockout punch to Mac/Linux.

Microsoft is fierce when they're competing, but when they're on top they wring every last cent out of the market. (If they didn't, it wouldn't have been worth their considerable up-front investment).

This, ultimately, is why it's bad for gamers if any one company 'wins'.

[kickmybum]

I'll get an Xbox 360 when NHL 2008 drops, regardless of how much it is. I haven't really had a reason to get one until then.

[Itchyeyes]

I'd consider a 360 with a nice price drop, but now that it's been a couple of years...I'm starting to get concerned about the console's life. After seeing what they did with the original X Box, I don't want to have a dead system after just a couple of years. The PS2 still has titles come out for it (God of War, Tomb Raider, popular sports titles) but nothing for the X Box. The PS3 could have a longer life cycle.
I wouldn't be that concerned about it. The original Xbox had a lot of problems that lead to its early demise. First and foremost was that even 4 years into its development Microsoft was still hemmoraging cash on every one they sold. On top of that they launched a year after the generation had started and they wanted/needed(?) to get a year start on their competition for the next generation. The 360 has none of these problems, and I would guess it has at least 3.5 to 4 years left in it, if not more.

[Mista Mafiosi]

I'm waiting to see news from the Sony camp. Cause I still think the WII will be the winner of the holiday rush.

[Zanzibar]

I agree with Yeti and Itchy. But I'm thinking that a bigger impact could be had if they drop the price right before GTA IV launches, which will no doubt move units for both the 360 and the PS3. If the price difference between the 2 systems is that much larger right when GTA drops, it will sway the people buying systems just for that game over to the 360 even more so.
This had not occurred to me. Genius.

[Rook34]

A price cut by MS won't be a killing blow for Sony, but it certainly is a nail in the coffin if Sony can't respond with anything worthwhile in the form of a plethora of games or a _significant_ price cut for their machine.

For MS, it is a brilliant move going towards the holidays. I would expect a H3 bundle soon, too.

[Mdot23]

This had not occurred to me. Genius.

Thank you my good man.

[NeoSuplex]

My guess is that they'll be doing a Price drop, if not around September, around October and GTA's release. It has more to do with staying ahead of Wii than with killing off PS3 though. Right now, 360 and PS3 both are selling chiefly to Hardcore Gamers and technophiles. Wii is scooping up the Non-Gamers and is poised to take the casual Market completely. MS (and Sony) cannot afford to let this happen... The Hardcore alone will not get them the kind of Market they need for the consoles to be truly successful. They need to be in a position where a game like Crackdown or Rainbow Six doesn't dominate the Sales charts for a month and then die away... Rather, games like Spiderman or Cars need to hit the top and have their long tails as the less release date centric casuals start to take over the market.

This, the second to third year of the Generation is when the hardcore should be taking a step back and the casuals should be stepping in. This process is already happening at a slower rate evidenced by the continued high sales of PS2. If MS and Sony keep their prices too high, they risk slowing down that process even more for their consoles or worse, letting the Wii have that market all to themselves.

To the core gamers, the Wii will largely be considered a second console aside their PS3 or 360. But to the people who made games like GTA, Guitar Hero, and the PS2 itself what they are today, the battle is far from over. And I doubt either of the three is unwilling to take part in the fight.

[Grimmjow]

price cut is nice and all but they need to fix the shity hardware. kinda weird though, people are already waiting for Halo 3 before they purchase a unit, they would make more money doing a price cut AFTER Halo 3 sells.

[Grimmjow]

A price cut by MS won't be a killing blow for Sony, but it certainly is a nail in the coffin if Sony can't respond with anything worthwhile in the form of a plethora of games or a _significant_ price cut for their machine.

For MS, it is a brilliant move going towards the holidays. I would expect a H3 bundle soon, too.

its already a given that PS3 will have some good exclusives in Fall, so its mainly just a matter of system price point.

[Zanzibar]

its already a given that PS3 will have some good exclusives in Fall, so its mainly just a matter of system price point.
Name some, plz. Ratchet and Clank, and what else?

[NeoSuplex]

Almost as if on Cue... (http://games.slashdot.org/article.pl?sid=07/06/08/1620203&from=rss)

Essentially, Micrsoft admits they're looking to Nintendo as the generation leader this time around, with low cost and family appeal driving their sales numbers ever higher. To that end, Microsoft is looking at a possible price cut and shift in strategies to appeal to a broader audience.

[RorschachCCCLX]

a price cut to 199 would be effectively cutting their own throat right now, just as it would for any sort of price drop from sony. when you lower the unit price, you are increasing the cost to profit ratio in a very unfavorable direction. it means you have to sell more games to make up the diffrence... they can probaly afford a reduction to 299 for the premium. they could most likely do more if they didn't need to spend so much on repairing and replacing defective units.


As for games, Phill harrison was right when he said they didn't need games to sell the system. its already sold fairly well for a system with no really truely AAA titles to speak of. (Resistance is sort of the PS3's Perfect Dark Zero) Sony has a brand name they are banking on to carry them though, and the word I hear from most customers is, they are waiting for the price to go down before they get a PS3 over a 360. They are then shocked to learn it will take another good year and 6 months to able to drop the price any.

[theguido]

I think they're going to milk as much as they can in terms of revenue around the time of Halo 3--they're going to have no problems selling them then, and then they'll cut it around Xmas-time for maximum benefit.

[CptTripps]

Shit if the price drops to $200, I would be another one and a cheap HDD of ebay for my computer room.

[Mrcheesyelf]

One effect of halo 3 timed or pre-christmas price drop would be to make up the minds of the people who were big ps2 players but never XBOX who were considering a ps3 for xmas but with not a great game line-up and some poor press, even non-hardcores know it!, a price drop may help sway them to getting a 360, could proof to be a big steal! i have quite a few friends who would never touch my xbox as they loved their ps2 too much, who now love my 360!! I know a price drop would sell a couple of systems to them and they wouldn't buy PS3's after that until there was a massive price drop, especially with the lack of exclusives

Been reading for quite awhile but first post!!

[TrackZero]

I doubt they will drop the price BEFORE halo3, because once kids show thier friends everyone is going to buy a system anyways. Count on more of a holiday sale.

Seconded. That's why Halo 3 is "out front" in Sept. I expect a Nov system price cut.

[Mrcheesyelf]

Seconded. That's why Halo 3 is "out front" in Sept. I expect a Nov system price cut.

Yeah i agree, people who have set them set themselves to buy halo 3 + 360 will buy without a price drop, its the xmas buyers that will be swayed by the price, would explain the slightly odd halo 3 release date aswell

[Wolfgang]

The 360 currently has an insane attach rate? It was 5:1 at one point. Anyone know the latest?

[karak]

I love this kind of stuff. Its like a giant chess game. Each company trying to figure out just when to do what and release what. All I can say about all this is its a damn good time for me to be a gamer.

[Kielaran]

Another thing to consider is the ramafacations this would have on the PS3 potential price cut. I know that it si all rumors now, but for sony to move units, a price cut is going to happen sooner or later and if Msoft beats them to the punch, then a PS3 price cut would be barely newsworthy. Also to think about is that right now microsoft makes money on each console sold, while sony does not, so a price drop for microsoft is less of a hit in profits compared to the same price drop for the PS3. The last thing to consider is that with the much larger library of games, 360 buyers would be much more likely to have more than one game in their minds that they want, making up for much, if not all, of the price cut during the initial sale of the console.

[Grimmjow]

Name some, plz. Ratchet and Clank, and what else?

Let me get them brb...gotta find this list I compiled some time ago.

[KingGorilla]

I forsee a run of Halo 3 special boxes, probably a paint job, a fake autograph, a faceplate. Add in another 30 bucks on the price. Microsoft will not drop the price while they are ahead. In their history as a company Microsoft has been very content with "Just enough to win."

[Stryfe01]

I'm in for it dropping at the least after Halo 3 has sold 5 million units....

[breeze]

microsoft should drop the core system altogether and drop the price of the premium system to no more than $250.

[Rook34]

Let me get them brb...gotta find this list I compiled some time ago.

Uh-huh...,...hmm...*looks at watch*...

Yeah, next time, just respond with the list nad be done with it. This way makes it look like you have no friggin' clue and are just another fanboy.