Minyanville just posted my latest article on today’s Microsoft (MSFT) Xbox 360 Price Cut.
Here’s a quick taste:
In the wake of Sony’s (SNE) PS3 price cut, Microsoft (MSFT) just slashed the price of its top-of-the-line Xbox 360 console by $100 to $299. It sounds like good news, but it’s just not what the industry needs.
Before, Microsoft sold three versions of the Xbox 360 console — Arcade at $199, Pro at $299, and Elite at $399. More money got you goodies like a hard drive and cooler accessories. Now, the Pro will be phased out at $249, while the Elite slides into the $299 slot.
Don’t get me wrong — cheaper products are better for consumers and two versions are much better than three. But the cost of entry into Xbox-land remains the same. Anyone who really wanted an Xbox 360 wasn’t waiting for the Elite model to come down in price — he or she would have already bought an Arcade or Pro model instead. So any positive impact on Xbox 360 sales will be temporary.
Continue reading Is Price-Cutting What the Video-Gaming Industry Needs?
Ultimately, what the industry needs is a Nintendo Wii price cut. The Wii is losing its competitive advantages as the Xbox 360 and PS3 come down in price and introduce motion-control mechanisms like Microsoft’s Project Natal.
The Wii’s been out for three years and sales are slowing – it’s time.
FYI – I took a short position in Sony (SNE) this morning. I think they’ve lost far too much ground in the video-game war, the dollar continues to weaken vs. the yen, and the PS3 price cut came way too late. This holiday season could be brutal for video-game hardware, and a Wii price cut (if it comes) would present serious problems for Sony – unlike Microsoft’s $199 Arcade offering, it offers nothing to bargain shoppers.
Full Disclosure: short SNE
Related posts: