Xbox 360 and the power of a $199 pricetag
By Chris Gaylord | 09.04.08
Microsoft announced it will chop prices on its Xbox 360 video game systems. While there are several 360 models, the lowest-end Arcade edition will cost $199 starting on Friday, making it the first current-generation console to bop below $200.
This new price packs a serious 1-2 punch against today’s video-game crop: For one, it undercuts the $250 Nintendo Wii, which has enjoyed the title of reigning console champion thanks to casual gamers. The Wii’s catalogue of fun, simple games and a competitive price tag has translated to a huge boost in sales for Nintendo. Americans bought more than three times as many Wiis than 360s in June (666,700 units vs. 219,800) and more than twice as many in July (555,000 vs. 205,000), according to NPD research.
The 360 price cut also plugs into a more psychological trend. Consumers set up weird mental hurdles for themselves. For two years, I eyed a particular line of LCD TV but refused to seriously consider buying one until the $1,200 price came down. Two weeks ago, the 32-incher dropped below $700 and now it’s sitting in my living room.
In today’s economy, plenty of Americans have been waiting for a similar price reduction before buying a current-gen system – or, in some houses, before picking their second.
“Microsoft’s research showed that 75 percent of the sales of the original Xbox and the PlayStation 2 happened after the price fell below $200,” reports The New York Times.
By the way, even with the PlayStation 3 alive and well on store shelves – outselling 360s this summer – the old PlayStation 2 is still close behind with 188,800 units sold in June and 155,000 in July. The PS2 costs only $129.
Of course, price is not the only factor. Xbox 360 came out well before the PS3 or Wii, meaning perhaps it’s tapered off because it’s reaching a saturation point – after all, only so many people want a video game system. Also, news of 360 units breaking – such as the so-called “red ring of death” syndrome where the systems freezes up indefinitely – might have scared potential customers into the arms of Sony or Nintendo.
But there’s a lot to love in a 360. It doubles as a DVD player. The games are top notch. Its online network is perhaps the most vibrant of any gaming console ever – you can download demos, stream YouTube, chat with friends, play against strangers, and – soon – watch Netflix videos.
So, will Microsoft’s move force competitors to drop their prices? Probably not, says Lazard Capital Markets analyst Colin Sebastian in an interview with the gaming-industry news site Gamasutra.
“At this point, we do not anticipate either Nintendo or Sony to match the Xbox 360 price cut,” says Sebastian.
In fact, Sony just announced a new high-end PS3 model for $500. As for the Wii, when you’re selling more than half a million systems a month, why bother dropping the price?
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2. Bravo | 09.05.08
Oh, I googled PS3 and this was in the search. So no I don’t look for ANY info on MS. But Obviously columist can not mention xbox without PS3 in their post save the may have VERY limited hits. Thank you for reading this.
3. Peaceupatowndwn | 09.05.08
I personally bought 2 Xbox systems and both times they worked fine for maybe 6 months after that the dreaded rings of death, I will purchase another 360 very soon but DAMN MS can yall please recall all of the defective units please!!!
4. john | 09.05.08
How do you put a smile on your kids face long after the wii rush has worn off? Simple the 199 xbox 360. Sure the Sony boys dont have anything good to say because their machine costs twice as much. They act like a bunch of snobs and are happy to be taken to the cleaners… All to be the very very very best. How many 10 year olds have a PS3? This is where the fight is. Notice the sea of sqeeky voices on xbox live, Microsoft has a lot of kids and the 199 price tag will only increase this. Xbox live is family friendly because its a pay service. Any illegal or immoral antics and your banned for life. No browser means no porn. Sony and sad to say Nintendo are wide open ( they call it a plus) both cant ban or even regulate. yes its the parents job but a little help keeping the pedos away is always welcome. That said, be prepaired for trash talking dirty mouthed little bastards telling you what they are gonna do to your mother… but thats par for the course.
5. jaime | 09.06.08
YEAH… THE PRICE IS SO POWERFUL
ask the gamecube, it was doomed because it sell for $99
nintendo should sell it for $199 because as microsoft say
every person buy the console that cost $199 no matter the value it has
get it?
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1. Bravo | 09.05.08
Why don’t they just donate them to goodwill so they can sell them for about $10 bucks and all the xbox owners on their 5th broken xbox aren’t spending $200 to buy yet another xbox, then MS will sell another millon to the same 200,000 people that keep buying them. Does MS even care that there is no value in their product… and no I don’t care it was a rhetorical question.