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Why doesn't Microsoft drop the price of the Xbox?

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I just read this post at slashdot and it made me think: http://games.slashdot.org/comments.pl?sid=228485&cid=18519643 Summary: considering that Microsoft is already turning a profit on the Xbox 360, why don't they get agressive and do a price cut? Possible reasons that I can think of: 1- They want to recover some losses (for example, from the first Xbox) 2- They're waiting until they won't lose money by doing a decent price cut (100$/€ at least) 3- They don't want to be agressive so they'll wait for the Wii and/or PS3 to get a price cut first. What do you guys think?



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In fact ,they are about to increase the price to 480 with the new model ,the Elite .



Diomedes1976 said: In fact ,they are about to increase the price to 480 with the new model ,the Elite .
Don't be a loser, that's a new model which didn't exist before. The previous models still exist, and their price is the same. In fact, the release of the new version might help to speed up a price cut, no?



My Mario Kart Wii friend code: 2707-1866-0957

I could be wrong, but I suspect that Microsoft is looking at the sales charts in North America and is seeing the XBox 360 outsell the PS3 (thereby increasing their sales lead), is looking at their game line-up for the rest of the year and sees no reason to drop the price of the XBox 360 at the moment.



instead of asking why doesn't MSFT drop the price of the xbox, ask yourself why should it? as we've seen with the halo discriminatory pricing, this is an analogous case. let the fanboys go out and buy the elite version or whatever, and after the dust settles, MSFT will act.



the Wii is an epidemic.

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Profitability is Peter Moore's #1 concern (and for good reason). Despite the fact that the hardware now costs less to produce than the sticker price, as a whole XBox isn't turning a profit due to marketing costs, the expense of XBL, ongoing development of a whole slate of services for consumers and developers, and most likely some pretty friendly deals with third and second party publishers creating that great 2007 lineup of games.



"[Our former customers] are unable to find software which they WANT to play."
"The way to solve this problem lies in how to communicate what kind of games [they CAN play]."

Satoru Iwata, Nintendo President. Only slightly paraphrased.

HappySqurriel said: I could be wrong, but I suspect that Microsoft is looking at the sales charts in North America and is seeing the XBox 360 outsell the PS3 (thereby increasing their sales lead), is looking at their game line-up for the rest of the year and sees no reason to drop the price of the XBox 360 at the moment.
What about Europe?
Lingyis said: instead of asking why doesn't MSFT drop the price of the xbox, ask yourself why should it?
To create trouble for Sony?



My Mario Kart Wii friend code: 2707-1866-0957

NJ5 said: Diomedes1976 said: In fact ,they are about to increase the price to 480 with the new model ,the Elite . Don't be a loser, that's a new model which didn't exist before. The previous models still exist, and their price is the same. In fact, the release of the new version might help to speed up a price cut, no?
For what we have heard ,the production of the old machines has been slowed down significantly .Besides ,once the Elite is out there the other SKU will be just the "crap version " nobody wants .So effectively they have increased the price .



2 main reasons: In NA, the 360 isn't selling bad to require a price drop. MS is making around $70 per premium 360, and is recouping alot of their launch costs. In Europe, its selling well enough to not "need" it, but did drop to 199 euros for the prem in Germany (a poor selling market). The 360 core in Japan as well as premium are also cheaper than any comparible market. So MS has dropped the price, just not majorly in the US. There isn't enough "must have" titles out to justify a demanding price drop. MS dropped the US price $100 after NPD reported just 80,000 units moving in April. The 360 has yet to go below 170,000 in any month. I am CERTAIN once August or September roll around, MS will institute a huge price drop in preparation for Halo 3 and GTAIV. Bill Gates already said they know Christmas 2007 will be the largest, and it will be. In all actuality, in Christmas 06, you could find Premiums for ~$300 USD, as some stores sold them with $100 off gift cards - so it's easily feasable for MS to reduce the price. IMO, MS is waiting for the 65nm process to come to market, and the old(er) models to sell out in June/July, as the 65nm process should lower the price *around* $20 a unit. Therefore, MS could easily sell the premium at $300 and MAKE A PROFIT. Good strategy if they want to make money. Of course, MS could loss lead and do $250 for the premium and $150 for the core. Now that'd be crazy....$150 for a core this year.



Back from the dead, I'm afraid.

NJ5 said: Lingyis said: instead of asking why doesn't MSFT drop the price of the xbox, ask yourself why should it? To create trouble for Sony?
That in itself is no reason to lower prices. In a price war nobody wins.



the Wii is an epidemic.