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GamesIndustry.biz

edit - gamesindustry's headline is referring to cost cutting manufacturing costs, not necessarily yearly price cuts [but they will probably follow].

...With more than two months to go before the Xbox 360 launches in Europe, a top Microsoft executive has announced that yearly price cuts are planned for the console...



..."We will wind up cost-reducing the product every year," Todd Holmdahl, corporate vice president of the Xbox product group, told Reuters. It's estimated that the 360 costs approximately $100 less per unit to manufacture than Sony's PS3, giving Microsoft more scope for price cuts...

if ms can drop the retail of 360 regularly, it could help establish a large base, quickly.

 

[DarienA]

Why would you announce that you're going to have yearly price cuts? I don't see the logic in that... I mean I know they didn't announce this to the general public... but still....

 

[AlteredBeast]

I`ll just wait til year two, then. Thanks for helping me make the decision MS!

 

[Beezy]

I guess I'll get Xbox360 2-3 years from now. Or whenever Halo 3 is released.

 

[Matlock]

Microsoft ruins own marketing mix for Xbox 360, blames Sony.

 

[svenuce]

You mean, hardware prices drop over time? Shocking!

Next up, sequels are safe sales bets!

 

[BigBoss]

Thanks for telling me not to buy your console MS until a couple of years down the line. :lol

 

[MrSingh]

Console price cuts! What a revolutionary idea!!!

 

[TheInkyVoid]

With the fairly fixed cost of hard drives, this should put to rest any notion that the 400 version of the console is the 'real' one.

 

[WarLox]

so...

PS3 = PS2
360 = Gcube
Rev = GB XX

.. am i right ?

 

[bitwise]

read carefully.

 

[rastex]

Title is misleading, the actual quote in the 3 line quote is We will wind up cost-reducing the product every year, Just because they reduce the costs of manufacturing doesn't mean that'll translate to savings for the consumers as shown by Sony with the PS2. If I'm an early adopter of the 360 then I hope they keep the price high for as long as possible, if I choose to wait then I hope they drop the price soon

 

[bitwise]

Title is misleading, the actual quote in the 3 line quote is We will wind up cost-reducing the product every year, Just because they reduce the costs of manufacturing doesn't mean that'll translate to savings for the consumers as shown by Sony with the PS2. If I'm an early adopter of the 360 then I hope they keep the price high for as long as possible, if I choose to wait then I hope they drop the price soon

haha yeah I love it. their title:

Microsoft pledges annual price cuts for 360

then you get right down into the article and its all

"Corporate VP hints at.."
"Microsoft was unavailable for comment at the time of writing."

yellow fricken journalism.

 

[krypt0nian]

 

[AlteredBeast]

After, I think a good amount of people will be getting the 360 right around the release of PS3. There will be a $50 cut if they know what`s good for them.

 

[bitwise]

After, I think a good amount of people will be getting the 360 right around the release of PS3. There will be a $50 cut if they know what`s good for them.

they'll have Halo3. they won't need a price cut.

 

[AlteredBeast]

Imagine Halo 3 and a price cut. That will take steam out of the PS3 lauch like FFVIII did for DC, even though DC`s launch was tauted as the biggest ever at the time.

 

[GDJustin]

haha yeah I love it. their title:

Microsoft pledges annual price cuts for 360

then you get right down into the article and its all

"Corporate VP hints at.."
"Microsoft was unavailable for comment at the time of writing."

yellow fricken journalism.

gi.biz doing what they do best

 

[Matlock]

It's amazing how many of you still think pricecuts are effective or efficient.

 

[AlteredBeast]

UK`s XBox history proves you wrong, pretty much saved Europe for XBox, it would`ve fallen on it`s face without the bundle/price cuts.

 

[TheInkyVoid]

It's amazing how many of you still think pricecuts are effective or efficient.

Yes.

Price cuts move sales across time, not platforms.

 

[jimbo]

Thanks for telling me not to buy your console MS until a couple of years down the line. :lol

You mean you had no clue that this would be happening? Considering this has been the trend with consoles for the past, oh I don't know, 15 years or so. I'd figure this would be common knowledge by now.

 

[Matlock]

UK`s XBox history proves you wrong, pretty much saved Europe for XBox, it would`ve fallen on it`s face without the bundle/price cuts.

You're ignoring decades of evidence that gamers are price insensitive. I can't say much for the price of Xbox in Europe, but I'm assuming it fell above the upper bound at which it'd be really attractive. That is to say, while gamers don't react to prices as much as other product-based customers would...there's still a limit.

What gamers really care about is brand association, value, and features, not a low price--if XB360 and PS3 go head to head at the same price, and PS3 stays its course as a mostly games-based machine while Xbox 360 keeps its position as the jack of all trades...well, let's just say 360 has a really good chance.

 

[Hurricane_Chris]

It'd be cool if the initial price of the $399 SKU was changed to $349. Starting the pricing from there would all but kill the $299 SKU -- who in their right mind would pass up the $349 SKU (especially considering accessory pricing). Then again, I guess the higher $50 price point gives them a larger range of wiggle room that they're probably not going to give up :-(

 

[Matlock]

Now that I think about it...About ideal pricing, they should have set it at $360, just for the fact it sticks in your head. Really easy and potential filled pricing that lends itself to advertisements.

360 for $360!

 

[nightez]

You're ignoring decades of evidence that gamers are price insensitive. I can't say much for the price of Xbox in Europe, but I'm assuming it fell above the upper bound at which it'd be really attractive. That is to say, while gamers don't react to prices as much as other product-based customers would...there's still a limit.

What gamers really care about is brand association, value, and features, not a low price--if XB360 and PS3 go head to head at the same price, and PS3 stays its course as a mostly games-based machine while Xbox 360 keeps its position as the jack of all trades...well, let's just say 360 has a really good chance.

Just where is this evidence to suggest that console buyers are price insensitive. If they were Microsoft/Sony/Nintendo wouldnt even be selling consoles at a loss.

 

[Matlock]

Just where is this evidence to suggest that console buyers are price insensitive. If they were Microsoft/Sony/Nintendo wouldnt even be selling consoles at a loss.

And if they were price sensitive, you'd see a switch from the industry that's traditionally frontloaded with early adopters.

All you're doing is pointing out the concept of upper bound, not how much pricecuts influence the buying public.

 

[Kabuki Waq]

wow you mean there will be yearly price cuts? Is this news to anyone?

 

[Willy Wanka]

That site I was talking about in the other thread was definitely gamesindustry.biz. :lol Thanks for reminding me.

 

[Bodom78]

I think its prety smart move if they do it. Many will hold off on buying the Expensive PS3 when they know the 360 will be cheeper and with a bigger library of games down the track. Die hards wont be phased as they will be buying at launch or close to. Then theres the inbetween people who will buy out of impulse or for particular games.

 

[DarienA]

I think its prety smart move if they do it. Many will hold off on buying the Expensive PS3 when they know the 360 will be cheeper and with a bigger library of games down the track. Die hards wont be phased as they will be buying at launch or close to. Then theres the inbetween people who will buy out of impulse or for particular games.

...wow man... you sir are f'n brilliant.

 

[Vennt]

I predict no price cut for the first 12 to 18 months of the Xbox 360's release, PS3 launch or not.

MS have very recently re-iterated their intention to be profitable this gen, with the most recent comments coming from MS stating that they are aiming to be profitable within 2 years from launch.

Cost-reducing measures will be used to bolster MS's bottom line, they are not going to take a bath on costs this time.

I expect a high-profile game release, or an attractive bundle, they are not stupid enough to try and halt the steamroller that is a new HW launch with a price-cut that will be relatively ineffective as a tactic and be costly to them over the short-term, they know that Sony will suffer launch shortages just as they will, and can rely on picking up the slack when the PS3 shelves are empty.

 

[Hydro_Alexis]

so...

PS3 = PS
360 = Dreamcast
Rev = N64

.. am i right ?

Fixed.

edit - gamesindustry's headline is referring to cost cutting manufacturing costs, not necessarily yearly price cuts [but they will probably follow].


if ms can drop the retail of 360 regularly, it could help establish a large base, quickly.

Desperation already microsoft ... the console aint even launched yet! seems to me like revolution has become a shotgun and 360/PS3 are water pistols.

 

[raYne]

:lol Way to jump to conclusions before understanding the article people.

In other news, Sony and Nintendo state that their next-gen systems will cost money.

 

[Suikoguy]

:lol Way to jump to conclusions before understanding the article people.

In other news, Sony and Nintendo state that their next-gen systems will cost money.

No way!

And you mean, to get a rebate I have to mail it in?

 

[Fuzzy]

:lol Way to jump to conclusions before understanding the article people.

In other news, Sony and Nintendo state that their next-gen systems will cost money.

You mean I can't buy them with the Xbox Live Marketplace Points?

 

[Mr_Furious]

edit - gamesindustry's headline is referring to cost cutting manufacturing costs, not necessarily yearly price cuts [but they will probably follow].

if ms can drop the retail of 360 regularly, it could help establish a large base, quickly.

:lol Don't kid yourself. MS will lower prices when they have to.

 

[Fjord]

I'm surprised you all don't have your own multi billion dollar corporations yet.

 

[King Dork]

Why would you announce that you're going to have yearly price cuts? I don't see the logic in that... I mean I know they didn't announce this to the general public... but still....

It's a strategy move. Microsoft probably thinks they can cut costs on the manufacturing of the console faster than Sony can with the PS3. You let the public know now that the price will come down eventually, but don't say when. So when MS does do so, Sony will have to stick to the high road (keep their prices high) or take further losses by cutting the price of the PS3 before their manufacturing timetable is ready to do so. Not much, but still a small jab from Microsoft.

This could also be a stockholder thing, basically MS letting their stockholders/wallstreet know that they are gonna be cutting costs and prices annually.