It's in the numbers.

Despite a superior library and cheaper price, 360 is still losing ground to PS3 in NA. Despite securing the rights to GTA IV's DLC, PS3 still got a larger hardware bump from the title.

360 software is still selling great. The platform isn't dead, but these facts suggets that the core market which is interested in buying a 360 at the current price point is close to being tapped, while PS3 has more growth potential at its current price point and userbase.

The question is: Is Microsoft willing to slash profits on the consoles it is selling just to increase the userbase? Will the surge in demand justify the lost profits?

I'm going to go with a 'no' here, in response to both questions. MS and Sony both know that they aren't going to seize the market leader position. The cost won't justify securing second place.

That would help it vs PS3 for sure - but only a little vs the Wii, probably not nearly enough to make a difference.  Hell in Europe the Arcade is cheaper than a Wii and the Wii still demolishes PS3 and 360 sales.

The Wii has the zeitgeist - its the one to get.  Price isn't going to change that.  A parent shopping for a Wii isn't going to look at a 360 and get that and throw in GoW, etc.  They're going to get the Wii and Mario and Sonic.

The problem both 360 and PS3 have with Wii is that they need a whole different market perception and games library to compete.  As I think someone senior from Ubi recently commented - PS3 at least has a chance due to previous brand perception and games, for the 360 its still a massive uphill battle to remotely appeal to the demographic currently hoovering up Wii's...

 You could flip that upsidedown.

Despite superior technical specifications, a bigger brand name, proven reliability, free entry into the blu ray club with every console, free online, wireless, huge franchises, and a price thats worth every penny supposidly... the Xbox360 is still outselling the PS3 in the U.S...

What did sony do wrong? Maybe they need to drop the price? Release more AAA titles? I mean its far from dead but its on life support. Is Sony willing to go deeper into the red to beat the 360 in the U.S?

Blablabla

Hi

Can we change topic to how cool Kirk is please?

My Premium 360 was precisely 10 € cheaper than my Wii. I bought them at different European Amazon shops (and that promotion has been available for months, it's still there; the Wii is now cheaper in UK though, because of exchange rates).

A price cut in USA is much needed though, after all there was only a $50 cut in 31 months.

I agree with most of what you're saying except for the cost being an issue for MS.  MS is almost literally floating in cash, and their investors have traditionally been conditioned to expect stock valuation increases instead of dividends (MS refused to pay dividends until the feds forced the issue a couple of years ago).

From what I know of MS corporate thinking, they're willing to throw huge piles of money at a market before calling it quits.  Look at the Zune... it's a failure in almost every sense of the word, yet they persist.  Why?  They believe they can eventually wear down the competition.

Looking into my crystal ball, here is what I foresee happening in August or September of this year:

1. MS announces/releases a new 360

2. The new 360 has a processed-reduced (45nm) GPU that allows the unit to run much cooler

3. The new, cooler-running 360 will virtually eliminate any remaining RROD issues

4. The new 360 will have a much quieter optical drive

5. The new 360 will come in two models: a $199 model with $80 GB hard drive, and a $299 model with $160 GB hard drive

6. All models will support HDMI

I don't see MS putting a Blu-ray drive into this generation of their console... that will be in the next generation, which is fairly far along in development.  The same for built-in WiFi.

You seem to be confused. I'm talking about 2008, when PS3 is gaining ground on the 360's install base. Not 2007, when it was the other way around. Sony did drop the price and they have released more high-quality games. It's payed off for them.

360 has already had the shiney new titles, and it's had a more modest price cut than PS3, and the result has been a more modest increase in long-term sales.

I just don't see why these two firms would want to try to limbo each other out of the market while somebody else is carting all the money off with a wheelbarrow. Why should these two duel to the death over the HD market which demands massive hardware and software subsidies to succeed?

Yea but it wouldn't be profitable and it's selling fairly well at the price it's at. You usually drop the price when you have saturated the market of people willing to buy the console at that price.

Only one problem with dropping the price -- stockholders.
The MS stockholders are already complaining about VG losses.
Reintroducing them could lead to the end of Microsoft as a console producer.

There is no value in being a market leader if you are losing money.

Mike from Morgantown

It will do something, I even think it will push the 360 over the wii in North america, I am expecting a $179.99 XBOX 360 by the end of the year after all.

Microsoft is trying there hardest to capture games and more games, so far they have easily the better line up than the wii or ps3 COMBINED, and with a price cut and more exclusives announced I think they can take off.

If those RPG's dont help them in JAPAN then it really is sad especially for square.

I was joking... I think I confused you more. But really it doesn't matter how a console manufacturer does it, they just gotta give people a reason to lay down that money. Theres been so much Xbox360 vs PS3 today that I just can't take it seriously.

@leetgeek.  You know why.