Microsoft Slashes Prices of Xbox 360 Models

September 05 12:05:01 PM, Yahoo News

NewsFactor - There is something for everyone, according to Microsoft officials who are touting the company's new prices for all three models of its video game console, the Xbox 360.

On Wednesday, U.S. consumers saw the Xbox 360 Arcade base model drop from $279 to $199 just a day after the software giant cut prices by 30 percent for the Xbox in Japan. And beginning on Friday, prices for additional Xbox models will drop. The 60GB Xbox Pro model will drop from $349 to $299, and the 120GB Xbox Elite will have a new $399 price tag compared to its old price of $449.

Microsoft also said that beginning this fall, the Xbox 360 would be the only console offering instant streaming of 12,000 films and television shows from Netflix. In order to view those films and shows, consumers need an Xbox Live Gold membership and need to have an unlimited Netflix subscription plan. Analysts say this kind of innovation may thrust Xbox ahead of its game-console competitors, Nintendo and Sony.

Historic Indicators

The move to offer the Xbox 360 for less than $200 is spurred by increased competition from Sony's PlayStation and Nintendo's Wii both in the United States and across the globe.

Microsoft, however, said it is just following historic indicators. History shows that more than 75 percent of all console sales occur after the price falls below the $200 mark, according to Don Mattrick, senior vice president of Microsoft's interactive entertainment business. "The majority of consumers make the decision to buy consoles once the price falls to this mark, making this an important milestone for consumers in the industry," Mattrick said.

Nintendo's Wii, in comparison, is priced at $249, while Sony's 80GB PlayStation 3 is $399.

Taking the Lead

Electronic Arts, a publisher of interactive games and software, came out last December with its predictions of who would be on top this year, and as of today, its crystal ball was right.

Electronic Arts predicted that the Nintendo Wii would sell between 5.5 million to 6.5 million units in North America and an additional 6.5 to 7.5 million units in Europe by the end of the year.

EA's prediction was correct. As of July 1, Nintendo sold 10.9 million units in the United States alone, according to the NPD group. Nintendo sold 18.1 million Wii units worldwide in the company's fiscal year between April 2007 and March 2008, and 24.5 million units worldwide since 2006.

Sony's PlayStation 3 was the second favorite, with estimates of between 9.5 million and 11.5 million units to be sold both in the United States and Europe by the end of the year.

Sony, however, has sold more than 12.85 million PlayStation 3 units worldwide since its 2006 debut, the company said in its results for the 2007 fiscal year, which ended on March 31, 2008.

The Xbox was in last place in EA's predictions, expected to sell between six and eight million units in the United States this year.

Microsoft, however, said it has sold 11 million Xbox units in the United States since its debut in 2005, and 19 million worldwide, beating out Sony for second place.

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