Microsoft should reduce the price to bring the perfect storm principle in to play before the summer months settle in. They will not have such a golden opportunity again this year. The question is whether they should use a combination to generate greater momentum, or should they hang back and reap greater rewards. They have ceded far too much market share as is generating profits off of the hardware. Not only to Sony but most especially to Nintendo.
To be brutally honest I doubt Microsoft would get nearly the effect at any other time this year as they would during the month prior to the launch of Grand Theft Auto. Not only that but the affect would be far more lasting, and far less contested. Right now Sony is out of position to match, and Nintendo has no cause. Later this year that will probably not be the case. No title released on the 360 this year will be any more mainstream then this. Finally this would give them one hell of a short term boost.
The question I would ask if this isn't enough to get Microsoft in the price cutting frame of mind. What would get them to lower the price this year. Making profit is good, but this a perfect opportunity to run up the score on Sony, and perhaps stall Nintendo off till the latter half of this year in the North American market.
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