I'm sorry if you were upset at my comment but I recall during the time period when NA VGCharters were freaking out about the economy, I saw quite a few posts of people outside of NA downplaying the situation. Again I'm sorry if you felt I generalized Australians in any way and in fact was going to visit Australia to live at my friend's ranch 2 years ago. Personally I think Australia is awesome, to be able to go to the beach and snowboard in the same day, toilets that flush backwards, and Summertime in our Winter seems amazing. Forgive?

Edit: Also as a music student I don't get much outside air, what little time I have is spent gaming or with my girlfriend, if i'm not doing either I'm probably locked in a practice room. As a result I watch practically no TV, read no newspapers and when it comes to news of other countries I know absolutely nothing. Since I myself live in an abnormal situation (I had no idea about Hurricane Ike for a good 2 weeks, I found out about it from a Ike benefit recital...) it's easy for me to assume the same of others. (that they don't get much news of the other countries, shoot I don't even get much news of my own country, AIM's news reports and VGCharts actually give me the most news...)

It is common for firms to lower price in a recession because people are less willing to spend money. You see a lot of sales and discounts when the economy is going poorly. As a result I would say that Microsoft's move wasn't really strategic.

However, what is interesting here is that neither of Microsoft's competitors were going to lower price - Nintendo because they already face excess demand (the Wii is if anything underpriced) and Sony because they are already selling at a significant loss. It is possible that Microsoft realised this and decided to take advantage of the fact.

Ultimately it's hard to say whether it's a strategic move or not. A lot of it depends on just how much Microsoft knew and when they decided they were going to cut the price. But either way it appears to have worked out well for Microsoft.

It was probably a little bit of column A and a little bit of column B. I wouldn't be surprised if they were planning the price-cuts months in advance, one only needs to look at the perfect storm they created, as the 360 has received fable 2, gears 2, last remnant and the nxe on top of the price-cut. It was all very well executed and it screams foresight. However given the worldwide economic issues they obviously would have looked at the current planned stretagy and tweaked it if necessary.

@Grahamhsu talking out of ignorance in regards to any country is a foolish endeavor. Educate yourself or don't make generalisations.

^Farmland yes I understand that it's not right but if you lived my life I think you'd find it rather impossible to educate myself...

i agree with the point of this thread.
It is really pretty amazing how Microsoft is competing this generation. If they had the Sony hardware and exclusives, (if the roles were reversed) then Sony would have been completely lost long ago.

But alas... the war rages on. I still think Microsoft is just delaying the inevitable though.

Microsoft have done a fine job this gen. I would imagine that if they remain sensible they could do even better next gen. They certainly have a solid platform to build upon.

The price drop by MS has been a stroke of luck. They couldnt have done it at a better time. With the economic crisis it makes it so much more appealing to consumers. The problem is that they dont have enough cheap models to meet demand, at least not where I live. Im a big gamer fan and all the shops I frequent in Tokyo are sold out of the 20,000 yen ($200) model. I dont think they anticipated the effect the crisis would have.

As for Sony this crisis screws them. Not just in the gaming department but across the board. The yen is stronger against foreign currencies and it kills their profits in overseas markets. Cheaper Korean electronic companies (Samsung, LG)) have been cutting in to their sales for years and this only complicates things.

As for the PS3 they are already selling at a loss and the crisis has put them at a further loss. To drop down the PS3 price even more could really hurt them financially, taking away money they could put in to R&D to create a more cost efficient model. However, if they stand their ground on the current price they could lose ground in Europe to MS.

MS has put them in a tough position. However, I dont see it at as a calculated move on their part. A price drop was due considering they are coming up on their third holiday season on the market.

If the rumors are true and MS comes out with a mini Xbox 360, it could really help offset the sales for an eventual price drop from the PS3. A streamlined Xbox360 would do very well, especially if bundled with a killer app that has been out on the market sometime.

Meanwhile the Wii is appealing to a wider range of gamers, several of which will move on to the maturer titles on Xbox360 and PS3. This helps the overall market in the long run. I think there will always be room for both. However, I see it as very difficult for Sony to overtake MS, especially with Wii in the mix.

I think MS has done amazing to turn things around, and show great patience in sticking to their guns. I thought they should of made price cuts after the $100 PS3 cut last year. It took them 1 full year to cut the price, but it's timing and amount were perfect.

I'm not really that confident that MS will pull all the right switches in the future. I still disagree with may of their approaches. I think they could of put the hurt into Sony much earlier and secured many more third party exclusives in the process.

The 2008 holidays will be a big victory for MS, but there is still along way to go.

Yeah, really good job by Microsoft.

I agree the timing was good, but the price drop was totally gonna come before the holiday season. The crisis is what really made it good for them. We also must consider that it is not really impacting the gaming market either. The one thing it is hurting are overall profits, especially for the Wii and Sony due to the strong rate of the yen.

The real question is how the Christmas season will turn out.  I think the Xbox360 will make further gains in marketshare due to the cost disparity and consumer weariness of spending.

In the long run it is an entirely different matter.  No way we can forsee market trends a year from now.  It would be like trying to anticipate the current crisis last October.  Even so it will be difficult for the Sony to overtake the Xbox 360 the way things look now.