Microsoft May Lower Xbox 360 Pricing to Boost Sales – Analysts.
Microsoft Corp. to Respond Sony’s Price Drop with Price Cut
by Anton Shilov
[ 07/10/2007 | 02:26 PM ]
The world’s largest maker of software is projected to decrease the price of its latest Xbox 360 game console shortly, analysts think. The move comes shortly after the company said that it failed to sell the number of consoles it predicted and also prolonged the warranty on the gaming machine due to increased failure rate.
Wedbush Morgan Securities analyst Michael Pachter stated in a note to investors that Microsoft will announce an Xbox 360 price-cut at E3 Media & Business Summit. As a result of the price drop, Xbox 360 core package will cost $249, the Xbox 360 premium version will drop to $349, whereas the Xbox 360 elite model will be available for $399, reports Next-Generation web-site.
Late last week Microsoft said that it failed to sell 13 million Xbox 360 game consoles by the end of its fiscal year and that it only managed to sell-in about 11.6 million units, which means that the popularity of the game machine among end-users is lower than expected. In addition, the company extended Xbox 360 warranty to three years and said it would provide reimbursements to those already paid for repairs of their consoles.
Even though sales of Microsoft’s Xbox 360 game console fell below expectations, the gaming machine has been outselling Sony’s PlayStation 3 in the recent months, which means that its installed base has been growing quicker than that of the rival. If the information regarding the price cut is correct, then the pace of adoption is likely to stay the same, which is positive for Microsoft.
But the biggest rival for Microsoft Xbox 360 is not the PlayStation 3 from Sony Computer Entertainment Inc., but Wii from Nintendo, which has been outselling PS3 and Xbox 360 combined for months in the U.S. As a consequence, both Microsoft and Sony will not only need to keep the prices on their game consoles inline with that of Wii, but also to ensure that their offerings appeal to casual or novice gamers, the auditory of Nintendo’s latest product.
Microsoft has not confirmed price cut on the Xbox 360 game console.