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Well, thanks to the scam that is the big Playstation 3 price cut (of 2007) that never really was (see article here:

Is Sony run by idiots? Playstation 3 price drop not real?),

it seems it is time to offer some advice to Microsoft:

Microsoft needs to cut prices on their hardware (Xbox 360 consoles) *now*, and do it in a big way.

I've seen and heard rumors that Microsoft was planning perhaps a $50 price cut on their hardware in response to Sony's announcement about their price cuts on the 60GB models of the Playstation 3 consoles.  If that was the case, they need to follow through on those plans -- despite the reality of Sony's cuts not being 'real' -- and really put the screws to Sony in this battle of next generation consoles.

Realistically Microsoft has it all over Sony when it comes to their gamer network.  Xbox Live is so well planned, and generally well controlled, that it's just a great experience for a gamer (in most cases).  Yes, there are some jerks in the system, and yes, some of the games attract crowds of kiddies that want to trash talk with horrible language and manners,  but for the most part it's a great system that allows you to make friends, play against them, talk with them, and socialize as you play.  For the most part it works very well for all comers.

Sony on the other hand has a free network (as opposed to the approximately $50 per years that Microsoft charges for Xbox Live), but I'm told over and over again that gamers get what they paid for from Sony's network.  It just isn't comparable at all to Xbox Live.

... continued in the comments area.  Please continue there to read the rest of my thoughts on this subject.


Comments
on Jul 14, 2007

... continued from the article above.  Thanks for continuing here.

Unfortunately by the time you add that $50 into the cost of the console you buy, you're looking at a closer gap than Microsoft should be working with when you compare the Xbox 360 console to the PS3.  The PS3 offers a built-in next generation video disc format technology: Blu-ray disc.  A format the Microsoft doesn't currently support.  Microsoft choose to support HD-DVD but then they have not yet built a console that includes that technology in the actual console.  Instead, you must purchase the HD-DVD separately, adding another $180 (give or take) to the cost of the system.

When all is said and done, Microsoft has no real pricing advantage over Sony, especially with the temporary pricing cuts that Sony effectively went with here.

So, it is time for Microsoft to do something about that problem.  They need to cut the prices on their consoles by a noticable amount.  A $50 cut would be an approximately 12 - 15% price cut on the boxes.  That's what I call a noticable amount.  It would probably cost Microsoft money, but they reportedly already lose money on every console they sell.  Why not take an additional loss so they can continue to pull in customers and keep them from going to Sony, or perhaps from going to Nintendo to buy a Wii.

Reportedly Microsoft and Best Buy have a sale coming up that will see Xbox 360 consoles sold with one year of Xbox Live access included in the bundle at no extra charge.  That is a good start, and yes, I know that is supposedly a $50 value, but I don't think that is really enough of a bottom line cut in the price of the box.  Cut an additional $25 - $50 off the bottom line price of the box and watch a bunch of fence sitters suddenly get more interested in purchasing an Xbox 360.  Get those older Xbox systems retired and replaced with the newer systems, where you can sell those customers the newer software and start making back that much more money.

I know that Halo 3 is coming out this fall and that when it does cash registers in many toy and gaming stores (as well as at Wal*Mart, Target, K-Mart, etc.) are going to go nuts.  Many teens are going to be spending their allowances, or demanding that Daddy or Mommy spend money on them to buy an Xbox 360 so they can play Halo 3 against their friends (and enemies, hehehe).  With Sony lacking any must have titles at this point, and without a Halo 3 type title on the horizon for them, perhaps Microsoft doesn't feel the need to lay some body blows on their competitor, but personally, I think it's time.

Microsoft should blast Sony now while they can, and keep the pressure up on them for as long as possible.  Don't let Sony's price drop scam catch any momentum at all.  Microsoft can put Sony well behind in this generations console wars if they want to.  The question is just how badly do they want to?

on Jul 14, 2007
Yea this crap about $299 OSes is garbage! Cut the price! Or offer a family discount like Apple does!

Oh wait. Oops! Sorry. Wrong category.
on Jul 14, 2007
It's true that Microsoft lost money on each console when the Xbox360 was first released, but that definitely is not true any longer. You can be sure that production costs have gone down since then, and they are certainly making money on each console that they sell.

I'd be willing to bet that they would still make money even after a $50 price drop. I was rather surprised when they didn't announce a price cut in response to Sony. I agree that a price drop would be the right move, and sway a not insignificant number of people.
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