Microsoft said on Thursday that it was cutting the price of its Xbox 360 game console. Starting this Friday, its base model will now sell for $199, down from $279. That makes the 360 the cheapest of the new generation of consoles — and, pointedly, cheaper than the $249 Nintendo Wii.
The consoles, of course, aren’t interchangeable, and price is hardly the sole arbiter of whether a console sells. Among the other bits of context here worth noting:
- Microsoft also cut the price of the Xbox last year at this time, so such a cut is unsurprising. Console makers have traditionally cut the prices of their machines over time to expand the user base.
- Xbox, which jumped out to an early lead on its competition — Sony’s PlayStation 3 and the Wii — has struggled more recently. In July, Microsoft sold 205,000 units, which was less than both the PS3 (225,000) and the Wii (555,000), according to figures released two weeks ago by the NPD Group, a market research firm.
Aaron Greenberg, director of product management for the 360, said Microsoft’s decision to drop the price was partly in keeping with an effort to stimulate demand over the holidays. He noted that 75 percent of console sales happen in the fourth quarter.
He also said 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.
“There’s a huge audience that aren’t willing to pay more than $200,” he said.
He argued that Wii sales don’t come at the expense of Xbox sales.
“We’re a complementary experience to the Wii,” he said.
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