Microsoft strongly considering a Xbox 360 price drop?

by Blake Snow { Feb 17th 2007 at 3:30PM }

During a strategic update yesterday, Microsoft CEO Steve Ballmer commented on on the likelihood of a 360 price cut. "I think every console in the world has had a price decrease sometime in the first few years. I don't know whether we'll have a price decrease in the first few years, and I don't want to comment on that, but I will highlight for you that every console has had a price decrease in the first few years," he said.

Vague, obvious, and emphatic all bundled into one. The vague and obvious part is expected, but the double emphasis part has us wondering if the company isn't strongly considering a price cut now. History tells us that spring is the most popular time to drop a console's price, but has the 360 already plateaued at its current $300-400 MSRP? Collectively answer that, and you'll have a good idea how soon Microsoft will drop its price.

Reader Comments (Page 1 of 2)

robby1051 @ Feb 17th 2007 3:38PM

Please stop with that picture!
its scarier the Venom and gives me nightmares...

AirIntake @ Feb 17th 2007 3:39PM

A good price drop would pretty much kill the PS3....so I'm not sure why MS hasn't done it already. Hell, a price drop would probably hurt the Wii significantly as well.

Slaziman @ Feb 17th 2007 3:42PM

I wants a price drop, new processor, new dvd drive, and possibly a bigger HDD and HDMI, then I'll be a satisfied Xbox 360 buyer

evildoer @ Feb 17th 2007 3:42PM

it better be a big price drop because the quality of the 360 is shit.

Slaziman @ Feb 17th 2007 3:42PM

With new processor I mean the same processor but smaller, if that wasn't clear.

NintendoFanbot @ Feb 17th 2007 3:53PM

DEVELOPERS
DEVELOPERS
DEVELOPERS
DEVELOPERS

The 4 words of success. If you have that you don't really need price drops because you'll be hot anyways. But then it would be nice for pricedrop sometime.

Nintendo and MS should do price-drops early next year after the major software hullabaloo dies down.

Chessasaur @ Feb 17th 2007 3:55PM

My 2 cents: MS should do a "Spring Break" (or something like that) sale or rebate program. Have it only last a month or two to make people feel like they have to get it now. Then they can go back to the normal price before a price cut before Xmas.

Mr Khan @ Feb 17th 2007 3:55PM

Yeah, i always figured MS would price drop after holiday 07, but during Holiday 07, sell the Premium bundled with Halo 3

Nintendo will probably price drop around the same time, after there is a big sales slowdown

john @ Feb 17th 2007 4:02PM

I don't have one yet, but I would pay $400 for a 360 with a larger hard drive, quieter operation (65nm chips?), and HDMI would be nice, too. Maybe they could drop the price on the two current models and have a new improved version for $400. The downside might be customer confusion with 3 different models to choose from.

WhatIsThatThing @ Feb 17th 2007 4:02PM

"Microsoft strongly considering 'A' Xbox 360 price drop"? Don't you mean, "Microsoft strongly considering 'AN' Xbox 360 price drop"?

Eric @ Feb 17th 2007 4:07PM

I can promise you if Microsoft hasn't already determined the timing/amount of a price drop, they are in the process of doing so. As companies prepare yearly budgets, they determine pricing & subsidy for products over the next 12 months. Microsoft's fiscal year ends at the end of June, so the likely senario is they are doing some high-level estimates now but won't have an 'approved' plan until the new budget kicks in.

The exception is every quarter most companies re-evaluate their budgets and adjust up or down based on current performance. It is possible they could plan a price cut in one of those quarters, but unlikely given a price cut in the first half of the year wouldn't do much to 'move the needle' as it would in the 3rd or 4th quarter w/Halo in the mix.

Of course, there's always the executive mandate where Stevie says "do it" and the financial analysis comes second.

raquor @ Feb 17th 2007 4:10PM

I'm all for a price drop.
Personally I figure they'll drop the core package all together.
Drop the premium kit to $300 and drop a Deluxe Premium with a bigger HDD and HDMI.

That would be enough to get me to buy one. In fact that's all I'm waiting for at this point. With all the TV and downloadable stuff a bigger HDD is a MUST...no point in buying a 360 until it comes out.

fishamaphone @ Feb 17th 2007 4:18PM

I think Microsoft should drop prices, and upgrade *both* their models so they've got HDMI, an HD-DVD drive, a coffee grinder, an automatic dog-walker, and your very own Jaleel White.

Because everyone wants Jaleel White.

Zeroman @ Feb 17th 2007 4:28PM

"10. "Microsoft strongly considering 'A' Xbox 360 price drop"? Don't you mean, "Microsoft strongly considering 'AN' Xbox 360 price drop"?"

It is 'A', but who gives 'A' crap?

REUYL @ Feb 17th 2007 4:47PM

Dear price drop:

PLS B 4 RAEL

h0mi @ Feb 17th 2007 5:04PM

MS needs to drop the price on its way overpriced accessories. Wifi should be $50 or less; no controller should be >$30, the ram cards should be under $30 and the only $100 HD should be 200+ gigs.
(At least the camera prices are reasonable since it usually comes bundled with headsets and xbox live and games/points).

jay @ Feb 17th 2007 5:09PM

i have a hard time believing this is gonna happen before the smaller processor is in place. The other problem is that by the time it is in place, Sony's gonna be manufacturing their smaller chip, and may be able to drop their price an equal amount while maintaining the loss per system that they have at present. if that happens, MS may not be able to increase their sales lead enough to justify the price cut

Kannon @ Feb 17th 2007 5:13PM

Its not the console that kills you, its all the accessories you need that do. Drop the price on the console so I can afford the accessories.

Marc @ Feb 17th 2007 5:19PM

Umm, as long as the ps3 is still $200 higher in price, MS has no true need to do a price drop, and in terms of competing with the wii better, they are targeted towards relatively different markets, so currently they have no reason to price drop, seeing as they just started to make money on their systems sold...(actually that was about 2 months ago)...but they still have 1.5 yrs of negative profit margins on the consoles to make up for.

Dave @ Feb 17th 2007 5:31PM

That's true, Marc--the consoles have only recently been profitable--but they will be cutting costs again when they switch to 65nm processors. When that happens, not only will they save money by improving their yield, but they'll likely be spending less on power and cooling technologies as well.

BIGGEN @ Feb 17th 2007 5:41PM

you can tell who the spoiled bitch kids are that probably don't buy their own consoles and shit. "i want a bigger HDD, i want HDMI, i want a quieter system, i want, i want, i want.......lil assholes.

Jypson @ Feb 17th 2007 5:55PM

21. you can tell who the spoiled bitch kids are that probably don't buy their own consoles and shit. "i want a bigger HDD, i want HDMI, i want a quieter system, i want, i want, i want.......lil assholes.

Posted at 5:41PM on Feb 17th 2007 by BIGGEN

Preach it!

why not the LS2LS7? @ Feb 17th 2007 5:57PM

To paraphrase Sony's other comments:

"The price dropping begins when Sony says it does."

This isn't because Sony is the biggest player or anything, but actually because Sony's platform is the one most in need of a price cut, and it's the one that will drop the most in cost to make the quickest (mostly by virtue of costing the most to start with).

MS doesn't have a lot of reason to cut 360's price, they'd rather change the config (add HDMI, larger HD) and leave it at the same price. N has no reason to cut Wii's price, it's already the cheapest.

Which leaves Sony. Sony will cut prices first and MS will respond (probably immediately). I don't know what N will do, depending on the price 360 drops to, perhaps Wii will just remain at the same price for now.

rdj75 @ Feb 17th 2007 6:01PM

"19. Umm, as long as the ps3 is still $200 higher in price, MS has no true need to do a price drop, and in terms of competing with the wii better, they are targeted towards relatively different markets, so currently they have no reason to price drop, seeing as they just started to make money on their systems sold...(actually that was about 2 months ago)...but they still have 1.5 yrs of negative profit margins on the consoles to make up for."

Not having a price drop may still put them in a good position when compared to sony but I am sure that microsoft is looking at all the people that hasn't bought yet. Look at all the people out there that won't be getting a ps3 or xbox 360 anytime soon because of the higher price, atleast with a price drop of $50 to $100 for the 360 the leap into nextgen gaming wouldn't seem as intimidating and would give microsoft that much more market share than they wouldn't have gotten without a price drop.

Grunge @ Feb 17th 2007 6:04PM

"14. "10. "Microsoft strongly considering 'A' Xbox 360 price drop"? Don't you mean, "Microsoft strongly considering 'AN' Xbox 360 price drop"?"

It is 'A', but who gives 'A' crap?"

Phonetically it's 'AN' but by the rules it's 'A'. This is because Xbox starts with a vowel sound, and for that reason it sounds weird to precede it with another vowel sound. Would you say 'an x-ray' or 'a x-ray'? For the record, a quick google search of those two terms shows use of 'an x-ray' outnumbering its counterpart 3:1.

BR @ Feb 17th 2007 6:12PM

Generally, use "a" if the noun following it begins with a consonant. Use "an" if the noun begins with a vowell.

For example: a bike, an icecube, a pedantic comment, an off-topic reply.

Slaziman @ Feb 17th 2007 6:29PM

"you can tell who the spoiled bitch kids are that probably don't buy their own consoles and shit. "i want a bigger HDD, i want HDMI, i want a quieter system, i want, i want, i want.......lil assholes."

So we shouldn't put demands on the systems we want? What, are you retarded? If that was the case everyone should buy a Wii instead of whining "i want better graphics!!11"

why not the LS2LS7? @ Feb 17th 2007 6:34PM

It's "an" if the next word begins with a vowel sound.

As in I'll be there in a minute, no wait, make that an hour.

Hour begins a consonant, but it begins with a vowel sound, so you use "an".

"Xbox" begins with "eks", which is a vowel sound. Is "an xbox". Just like it's "an X-ray".

LR @ Feb 17th 2007 6:37PM

A price drop is inevitable. And since we're approaching the 2 year mark later this year, I'm not surprised Microsoft is mulling the option.

Honestly, if they wait until 2008, I think it'll be too late. The best time to make a break would be this year. Make yourself stand out from the competition, and/or force them to adapt. And please please please release a larger hard drive.

Now if you're Sony, I would consider bundling games and/or accessories, and lowering the price (which is a must!). I'm not sure games alone are enough to justify such a high entry cost. Since there is hardly any software, this one is still a question mark.

Nintendo really doesn't have to do anything just yet. They're actually sitting pretty this year. It would be interesting to see a Wii/DS Lite bundle by Christmas though.

Frankie @ Feb 17th 2007 6:46PM

360 sales are slowing down. They are only shipping about 2 million units for the first half of 2007, while the Wii is actually ramping up production to 1 million console a month in April.

T_ConX @ Feb 17th 2007 7:06PM

Wow! I knew they were going to announce this... two and half weeks after I PAID FULL PRICE for an XBox360...

Steve 3.2 @ Feb 17th 2007 7:11PM

The 360 had a 'price cut' in the form of free games and controllers offered with the purchase of the system since the holidays last year. And you can get a free game with purchase from Circuit City starting Sunday. Unless it's a serious decrease ($100), I don't think such an action will really boost sales all that much.

Nick @ Feb 17th 2007 7:11PM

I think like it has been said by other people that it would will probably be something like a new version of the 360 with HDMI/Bigger HDD at 400 and the current 400 down to 300 and the core axed. Or at least that's what I hope, I would like the 360 once it has HDMI. And to the guy saying that people who want want want are the kids that dont buy their own consoles, umm have you ever thought that some of us might just want to get the most bang for our buck? Personally, if I wasn't paying for anything I wouldn't give a rats ass because it wouldnt be my money and then I would just get a new one once something better came out.

Grant @ Feb 17th 2007 7:36PM

while it is a hell of a lot more profitable to keep the price drop as a resource for when sony drops theirs, i feel that if MS was to do a price drop now it would pretty much destroy PS3. I don't dislike either, but with a $300(assuming a $100 cut) difference, thats some serious bills, and unless you pray to sony every night, want to watch blu-ray movies or NEED HDMI, the 360 would just make more sense. even those spoiled kid's parents won't buy them a PS3 when the (premium)360 goes $300. I wouldn't be against it either, since MS originally ran a big defecit to get XB1 going, and to take a devestating lead over your competition this early... i wouldn't call it crazy.

and just for the record:
"For the record, a quick google search of those two terms shows use of 'an x-ray' outnumbering its counterpart 3:1"
just proves that the majority of the internet is pretty much retarded. Use reliable sources when you prove a point, not a garbage pile, no matter how big it is.

BIGGEN @ Feb 17th 2007 7:45PM

So we shouldn't put demands on the systems we want? What, are you retarded? If that was the case everyone should buy a Wii instead of whining "i want better graphics!!11"

is that what i said? let me go back......hm, no, didn't say that. are YOU retarded?

Slaziman @ Feb 17th 2007 9:02PM

Umm yeah, you said that because we wanted something on a system before we bought it, we were suddenly spoiled brats. What do you suggest, that we just buy it even if we feel it doesn't give us the most bang for our buck?

Slaziman @ Feb 17th 2007 9:03PM

Or in other words, if I don't want a console that sounds like a vacuum cleaner, I'm a spoiled brat? Maybe, after all, YOU are retarded.

Grunge @ Feb 17th 2007 9:34PM

"and just for the record:
"For the record, a quick google search of those two terms shows use of 'an x-ray' outnumbering its counterpart 3:1"
just proves that the majority of the internet is pretty much retarded. Use reliable sources when you prove a point, not a garbage pile, no matter how big it is."

No, this proves how the majority of native speakers speak. The 'x' in both 'Xbox' and 'x-ray' is pronounced as 'ecks' (a vowel sound) whereas in 'xylophone' it's pronounced 'za' (a consonant sound). In general, native speakers of English will avoid making two vowel sounds in a row.

Oh, and for the record, www.xbox.com uses 'an Xbox' uniformly. So ... shut up because I'm right?

010111 @ Feb 17th 2007 9:35PM

"just proves that the majority of the internet is pretty much retarded. Use reliable sources when you prove a point, not a garbage pile, no matter how big it is."

linguists frequently use Google-as-corpus. but then you are probably much smarter than them. and know more about language as well.

Rob @ Feb 17th 2007 9:37PM

umm, so how much will microsoft lose on each console sold assuming that they do have a price drop?

BIGGEN @ Feb 17th 2007 10:33PM

"Umm yeah, you said that because we wanted something on a system before we bought it, we were suddenly spoiled brats. What do you suggest, that we just buy it even if we feel it doesn't give us the most bang for our buck?

Or in other words, if I don't want a console that sounds like a vacuum cleaner, I'm a spoiled brat? Maybe, after all, YOU are retarded."

are you done retarded spoiled bitch? hahaha actually dude, i would kind of like to see that stuff too, but i (along with millions of others) are already satisfied 360 buyers. that's what made you sound like a spoiled bitch. never satisfied with anything unless it's the best or at least better than someone else's (that's the way it came across). and if your 360 sounds like a vacuum cleaner, you seriously need to get it checked. because NO 360 sounds like a vacuum cleaner unless it has serious issues.

steve17 @ Feb 17th 2007 11:27PM

i think i read this before earlier: microsoft needs to chuck the core edition drop the premium to 300 and put a new one(including a 100gig hard drive, built in HD DVD, HDMI) for 400. microsoft is in a great position to secure they place at the top for good. im sure microsoft knows exactly what they are doing and if they do it right they can pull this off with a clean cut death to sony.

james @ Feb 18th 2007 12:31AM

A price and I'll give in and get one instead of a PS3

The ZeroCorpse @ Feb 18th 2007 12:54AM

I love my 360. It's totally worth the $400 I paid for the new one (actually, after selling my old one which I won, I ended up paying about $100 for my new one, but still. . .)

BUT I do agree that accessory mark-ups are terrible. $50 for a controller is ridiculously high. $100 for the wifi adapter is pretty bad, too.

harvsorrow @ Feb 18th 2007 1:25AM

I miss english class...*sniffle*

the boogey man @ Feb 18th 2007 2:55AM

IF they do drop it before xmas '07 it'll probably be around may...just makes fiscal sense for them to raise their cash inflows before financial end of year...it would be smart if they did that and had a HD-DVD or bigger HD bundle AND a copy of Halo 3 when came out in the fall...they'd slaughter ps3 at least and maybe, just maybe, run over the wii on the condition that nintendo finally makes enough units to satisfy the demand and open up the market a little for M$ to squeek by...

on a side note i think the new cheaper xbox 360 should have a virtual chuck norris to kill all the annoying b@stards on live...and the dude that started the grammar thing...chuck should get him too...

WillTheSecond @ Feb 18th 2007 9:08AM

There are already some decent bundles here in the UK, not that I'd buy them. There's a whole year of Wii goodness ahead of me yet before a 360. I'll buy one when two things happen here in the UK: 1) We hear exactly how good Bioshock, Mass Effect and Halo 3 are, and 2) when the price drops. I want to be paying under £250 for this console and at least two games (Currently there are some decent bundles for three games and a controller for £300, but they're few and far between, I'm sure a Mass Effect and Halo 3 bundle won't be hard to find around Christmas time. There's also the extra £40 to pay for Xbox Live.) The price drop in the UK would hopefully be something like dropping the current price of £280 to, say £220, that would allow for some great bundle deals.