Xbox 360 to be Lowest-Priced Next-Gen Video Game Console

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By Daniel Terdiman, CNET News.com

 

One of the biggest selling points of Nintendo's Wii video game console since its launch nearly two years ago has been that it was the lowest-priced of the trio of next-generation machines, which also includes Microsoft's Xbox 360 and Sony's PlayStation 3.

(© CNET)

 

To date, the Wii costs $249, while the lowest-priced Xbox, the so-called "Arcade," retails currently for $279. An 80GB PS3 sells for $400.

 

But Microsoft said Wednesday that it will drop the price of the Arcade on Friday to $199, breaking through what some have said is the all-important psychological price level of $200. At that price, industry observers say, the market opens up to mass levels of consumers.

 

Microsoft will also drop the price of its 60GB Xbox to $299 and its "Xbox Elite," which has a 120GB hard drive, to $399.

 

"The fact that the Xbox 360 is now cheaper than the Wii is definitely a big shift in the market," said Aaron Greenberg, director of product management for Xbox 360.

 

The news has been rumored for some time and was first reported as fact Wednesday by BusinessWeek.

 

For Microsoft, this is a crucial step along its path toward winning the next-gen console wars. At E3 in July, the company said in no uncertain terms that it will win the battle, at least with Sony. It hedged its bets on out-selling the Wii, which has been dominant over the last several months, according to industry analyst NPD Group.

 

In fact, BusinessWeek reported that Don Mattrick, senior vice president of Microsoft's interactive entertainment business unit (and the person who had been on-stage at E3 and committed to winning the generation), said that he doubted the Xbox could catch up to the Wii at this point.

 

"I'm not at a point where I can say we're going to beat Nintendo," Mattrick told BusinessWeek. "We will sell more consoles this generation than Sony."

 

Of course, some have said that the appeal of the Xbox, despite being the first to hit 10 million units sold in North America, is still limited and that over the next few years, the PS3 will eventually catch up to and surpass the Xbox.

 

Until now, Nintendo has shown little interest in lowering the price of the Wii, and thus its profit margin. And while Sony has effectively lowered the price of the PS3 by offering only an 80GB version for the same price as what was previously a less-powerful version, it has little room to maneuver on price given that it is still subsidizing the PS3 at its current level.

 

By comparison, because the Xbox has been out a full year longer than both the Wii and the PS3, it has already achieved efficiencies of scale that have allowed it to slowly lower the Xbox's price.

 

To date, the 60GB Xbox has done about 60 percent of total Xbox 360 sales, said Greenberg, with the Arcade and Elite models each accounting for about 20 percent.

 

But with the Arcade's price dropping below $200, Greenberg said he thinks that model is "now picking up steam."

 

"Over 75 percent of all console sales historically were sold below $200," Greenberg said. "We know that there's tens of millions of PS2 owners who bought their systems when (the PS2) hit $199."

 

In other words, Microsoft is hoping that at $199, the Arcade can become the next PS2 and sell well over 100 million units.

 

Source: http://tech.msn.com/products/articlecnet.a...7&gt1=40000

$200 is a great deal for what the XBOX 360 has to offer to the next gen community. What are your thoughts about this?

[Gryph]

Buying a 360 without a harddrive is ridiculous.

[Lucandrake]

What's ridiculous would be the masses that are unaware of that ridicule itself.

[L.S.D]

But it is still a great enticement for those wnating to own a next-gen console.

[Gryph]

But that console is pretty much worthless without a harddrive. You can't save, you can't really use the Live! Marketplace.

[GodPigeon]

Still comes out more expensive then a PS3 when you buy everything afterwards. MS knows what they are doing

[Gryph]

What do you mean by buy everything? I'm thinking of getting a 360 so I want to know what things I might need.

[GodPigeon]

What do you mean by buy everything? I'm thinking of getting a 360 so I want to know what things I might need.

Well by everything i mean everything the PS3 already gives you. But if you go for a 360, dont get the Arcade, get the Pro, the Charge and play kit, and a year of Live. You should be perfectly fine.

[L.S.D]

How do you add up to $499 with XBOX arcade agt $199? List out the price of 120GB HDD, a headset, and one year of Live. I would think it wouldn't add up to $499. For the battery, just get those normal rechargable batteries, it work fine for me.

[GodPigeon]

but it can go up to 400 which is the cheapest PS3 out right now. ALso, those normal rechargable batteries dont let you play while it charges. The PS3 Controller can go weeks and months without needing to have been charged and keep going. the Xbox 360 controller goes like 1 week and u gotta buy new ones.

[L.S.D]

but it can go up to 400 which is the cheapest PS3 out right now. ALso, those normal rechargable batteries dont let you play while it charges. The PS3 Controller can go weeks and months without needing to have been charged and keep going. the Xbox 360 controller goes like 1 week and u gotta buy new ones.

I am using 4 Sony Lithium Batteries, 2 for backups and 2 for controllers. I only need to change the battery once a month, of course i didn't play long hours but a minimum of 4 hrs a day. PS3 controllers last for months without charging? That is exaggrating.