What Does a $199 Xbox Really Mean? Is this the Beginning or the End?

[Squilliam]

Doktor85 said:
This price point for the arcade model will certainly help, $199 is the sweet spot. However Microsoft created on inferior Xbox 360 in the minds of gamers. They did the opposite with the Xbox 360 Elite. Although the cheapest Xbox 360 will soon reach $199, I believe that Microsoft still need to reach their sweet spot. I'm referring to the Xbox 360 Premium. When this version reaches $199.

I also think Microsoft will drop out their Arcade model, before the end of 2010. Because they price difference will be too small between their models. Eventually the arcade model will become irrelevant.

This price drop will only slowdown Sony and won't effect Nintendo that much. Sony needs to drop $50 within 6 months. The gap won't be different after these 6 months. Nintendo won't drop for at least 12 months. There might not be a price drop beyond 12 months, but simply add in motion plus to the bundle.

Actually its the fact that there is no HDD which will allow Microsoft to scale the price of the Arcade SKU all the way down to $150 or less. The HDD is more or less a fixed cost and it doesn't scale down in price nearly as quickly as the other components. This means theres no reason why an Xbox 360 Arcade couldn't eventually be cheaper to produce than the Wii will ever be. *This is a product of the design which enables the whole system to be scaled down, whereas there isn't much room to cut costs in the Wii*