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Xbox 360 price cut is clearance for new model

The rumors of a $50 price cut for Microsoft's 20-gigabyte Xbox 360 video-game console have been swirling for weeks now. It turns out they're true. But the reduction isn't exactly what it might have appeared.

In reality, it's more like a clearance sale, designed to empty the shelves for a new Xbox 360 with three times the digital storage, at the same price as before. The company says the new 60-gigabyte Xbox 360 will hit U.S. and Canadian stores in August at a price of $349.99.

As widely reported in advance, Microsoft is dropping the price of the 20-gigabyte Xbox 360 to $299.99. The unexpected twist: Sales of that model will end when current supplies run out.

In the highly competitive video-game console market, the move may have less of an impact than if the company had permanently decreased the price of the primary Xbox 360 model. A sustained price of $299.99 would have made the main Xbox 360 about $50 costlier than Nintendo's popular Wii game console, and $100 cheaper than Sony's least-expensive PlayStation 3 model. (Microsoft sells its Xbox 360 Arcade model, without a hard drive, for $279.99)

The effect on the market will depend on how much value consumers place on the additional 40 gigabytes of storage in the new Xbox 360 model, said Michael Pachter, an analyst at Wedbush Morgan Securities. Consumers use the Xbox 360's hard drive to store downloaded games and other media, including television shows and movies purchased from the Xbox Live online video marketplace.

Sony prices its PlayStation 3 model with 80 gigabytes of storage at $499.99, and one with 40 gigabytes of storage at $399.99. The PS3 has built-in wireless Internet access capabilities. The Xbox 360 requires a $99.99 adapter for wireless Internet access.

Pricing of the Xbox 360 is a key financial consideration for Microsoft's Entertainment & Devices Division, which includes the company's video-game operations. The division is under pressure to post consistent operating profits after years of losses. The move comes on the eve of the E3 video-game convention in Los Angeles, where Sony, Microsoft and Nintendo will be showing their upcoming games and accessories.

I'll be reporting from E3, so watch for coverage here starting Monday.

Posted by at July 13, 2008 12:01 a.m.
Category:
Comments
#150451

Posted by unregistered user at 7/13/08 4:43 a.m.

I wonder if the the 60gb model will have the new motherboard and chipset, designed to produce less heat and not fail as much? I also notice that it has the HDMI port, something that the 20gb model does not. So it has to be a new board.

Anyone have info on that?

#150454

Posted by unregistered user at 7/13/08 5:49 a.m.

the 20 gig model does have hdmi since the falcon mother board update...

#150474

Posted by unregistered user at 7/13/08 9:25 a.m.

Ummm..about this bit from Todd Biship, which claims "The division is under pressure to post consistent operating profits after years of losses". Well is Todd Bishop had found time to actually read Microsoft's earnings reports for the past 3 quarters, instead of contantly shilling fr Google, he'd had found out that the Entertainment Division has been consistently making profits for 3 sraight quarters, making as it were some approx $600 million in profits, since the Halo 3 quarter in September last year.

#150475

Posted by CaptRedBeard at 7/13/08 9:25 a.m.

and yes they have pretty much had the overheating problem fixed for some time.

That's why I always give MS products a year before buying, got to wait for them to make it right.

#150479

Posted by The_Ghost at 7/13/08 9:50 a.m.

So there is no price drop in the Arcade or Elite models?

#150480

Posted by unregistered user at 7/13/08 10:07 a.m.

@ The_Ghost, its amazing that Microsoft didn't drop the price of the Aracde. As it stands right now, The Aracde is selling for only $20 less than the $300 Pro. Given that the Arcade was hardly selling any units, even when the price difference with the Pro was $70, no one in their right mind is going to buy the gimped Arcade now, when they can add just $20 and get a 20Gb Pro. This pricing simply doesn't make any sense, unless Microsoft is trying to tell us that the 20 GB hard drive in the Pro only costs $20. The Arcade was a big mistake to start off with. Consumers simply don't want it. Its time for Robbie Bach and his cohorts at Microsoft, to admit they screwed up and simply let the Aracade die a natural death.

#150481

Posted by make_or_break at 7/13/08 10:12 a.m.

(yawn)...so all that's accomplished is another 40 gigs worth of data storage, and the clearing out of unsold Premium inventory?

No Blu-ray version? (no more excuses about there being a format war now) No built-in web access? Just the same old same old, only with a bigger hard drive? Still think you can cram all that gaming content into a DVDs and get away with it, do you Redmond? Still charging extra for features other devices now take for granted.

Classic MSFT non-event. Large cap hard drives are dirt cheap these days, so 60 GB isn't even worth writing home about. What's the iPod have in its Classic's belly? 80 GB? 160 GB? How about MSFT's own Zune? 80 GB? This is a non-starter if there ever was one.

#150482

Posted by unregistered user at 7/13/08 10:17 a.m.

@ Todd Bishop, this bit from you : "the move may have less of an impact than if the company had permanently decreased the price of the primary Xbox 360 mode".
I think you still don't get it. What Microsoft is doing is simple. They sell the 20Gb Pro's at $300 till they "run out" (which they could drag out for as long as they like). The moment the 20 GB's run out, they cut the price of the 60GB Pro's to $300, the Elite to $400, and the Arcade to $250. They end up giving the apperance of TWO price cuts instead of just one, and get 2 price cut bossts instead of just one. Already, Amazon has been selling the Elite for $400 as a "special deal".

#150484

Posted by rcdurden at 7/13/08 10:20 a.m.

More crappy, overpriced, Microsoft hardware, and crappy Americanized, sloppily coded games... And not even a true price cut. No thanks.

#150485

Posted by unregistered user at 7/13/08 10:26 a.m.

@ make_or_break, Blue Ray? We don't need no stinking Blue ray in the 360. What the heck does blue ray have to do with gaming? 360 games have cosnsitently looked better and run better than PS3 games, and have faster load times than PS3 games, because the DVD drive in the 360 loads much faster than the Blue ray drive in the PS3. If you only wanna watch "HD" movies, you can go buy Blue Ray, or alternatively, simply buy a 360 and download high qiuality HD movies. If you wanna play the best line up of high quality games on any next-gen console, just buy a 360 now.

#150487

Posted by unregistered user at 7/13/08 10:34 a.m.

Hey, "rcdurden", get a life, and take your Euro-trash garbage elsewhere. The same America you are trashing, saved your sorry Euro butts from Hitler in WW2, saved you ungratreful Euro-haters in WW1, eand ven as recently as a few years back, America had to come save the sorry excuses of Europe YET AGAIN, in the war in Bosnia, Croaia and Serbia. You could show some respect.

#150498

Posted by unregistered user at 7/13/08 11:18 a.m.

If Bill Gates ever puts a Blue Ray drive in a 360 I will personally fly to washington to slap him.

#150508

Posted by unregistered user at 7/13/08 11:46 a.m.

@Todd

Sorry, but this is old news.

@#150474

Todd is right. E&D has never had a profitable fiscal year and is under pressure to do so. This year's profitability partially reflects the $1 billion warranty being backdated to last year.

@#150487

We had some help during WWII. For example, we were outnumbered on D-Day by Brits, Canadians, Australians, Kiwis, etc. We also did business with the Reich right up to and even after our entry into the war, which incidentally wasn't until 1941, years after it began. Something to keep in mind. As for your "Euro-trash" comment, way to show him that some of us can be every bit as ignorant as some non-Americans.

#150524

Posted by unregistered user at 7/13/08 12:45 p.m.

@ 150508

# 1. Todd is wrong. E&D has been profitable for 3 straight quarters, making approx $600 million in the last 3 quarters alone, and when the 4th quarter results comne out next week, ED would have been profitable for the entire fiscal year. It's no use Todd Bishop going on about E&D not being profitable, when E&D has been profitabke for 3 quarters. That is factually incorect.
As for your harping about the $1 billion write off last year, a write off for abnormal expenses in a previous quarter/year, has never meant a company cannot be profitable in subsequent years, or subsequent quarters. That's not how it works.
Companies from Ford, Toyota, and Sony, have done write offs for deffective products, and gone on to make profits in sebsequesnt quarters, without any craping from haters.
The writeoff has already been accounted for in the June 2007 reults. You can't account for it again in June 2008 results. Bottom line: The 360 is solidly profitable today.

#150527

Posted by unregistered user at 7/13/08 12:58 p.m.

@ 150508, wrong again. While it's possible we may have been outnumbered on D-Day by the Brits, there is no way we were outnumbered on D-Day by Canadians, Kiwis or Austrlains. Heck we had more troops in WWII than the entire Kiwi population! I suggest you check your facts. Worth pointing out though, that the Brits were fightin for their very survival, in their own homeland, while we were fighting away from home, to help defend the Brits from German attacks. After all, our real quarrel was with the Japanese who had attacked Pearl Habour. I didn't see no British troops out there in Pearl Habour helping defend America against the Japanese.

#150539

Posted by unregistered user at 7/13/08 1:50 p.m.

and how about europe? will be here a price cut and the new 60GB version?

#150542

Posted by unregistered user at 7/13/08 2:28 p.m.

@ 150539, Europe already had a price cut in March, just b4 the GTA IV launch, and expreienced a doubling of 360 hardware sales. Is Europe going to have the 60 GB SKU? You bet.

#150544

Posted by unregistered user at 7/13/08 2:34 p.m.

i can't wait when will appear in europe 60GB version, i hope at the same time with USA

#150589

Posted by mrjackson206 at 7/13/08 6:17 p.m.

So will we be able to buy the 60GB hard drive separately, instead of having to buy a whole new system?

#150606

Posted by unregistered user at 7/13/08 7:03 p.m.

"@ make_or_break, Blue Ray? We don't need no stinking Blue ray in the 360. What the heck does blue ray have to do with gaming? 360 games have cosnsitently looked better and run better than PS3 games, and have faster load times than PS3 games, because the DVD drive in the 360 loads much faster than the Blue ray drive in the PS3. If you only wanna watch "HD" movies, you can go buy Blue Ray, or alternatively, simply buy a 360 and download high qiuality HD movies. If you wanna play the best line up of high quality games on any next-gen console, just buy a 360 now."

This guys has never played a PS3...

#150609

Posted by seattle4ever at 7/13/08 7:15 p.m.

GO SOUNDERS!

#150615

Posted by unregistered user at 7/13/08 7:48 p.m.

@ 150606, wanna bet?

#150668

Posted by unregistered user at 7/13/08 11:11 p.m.

@150524

Learn how to read.

@150527

That was meant to be read as additive. In other words, more non-US troops among the allies on D-Day than US troops. And it's a fact.

#150838

Posted by unregistered user at 7/14/08 12:30 p.m.

@ 150527, in other words, the US had more troops in the D-Day invasion than any single country on the planet(including the British who's very survival as a nation was at stake), even with the US accounting for less than 2% of the world's population at the time. In addition, it wasn't even America's war. It was an European war(like another thousands of wars the "superior" Europeans had been involved in, in the past 300 years alone). You people got yourself into a nasty war, then turned round and had Churchil beg and plead and whine for America to come save your sorry butts yet again. In the past 100 years, no people have come even close to carrying out gemocide on a scale or witgh such brutality that matches the holocaust, which you Europeans commited.

#153382

Posted by CaptRedBeard at 7/21/08 2:37 p.m.

Wow so many 'facts' flying around here.

To the person above there were more Russians killed by Russians then the holocaust, just sayin.

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