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Microsoft cuts price of Xbox model

New York, August 27, 2009

Microsoft Corp is slashing the price of its high-end Xbox 360 model by $100, ratcheting up the stakes in the game console fight this holiday season.

Microsoft will drop the price of the Xbox 360 Elite to $299.99, it said on Thursday, just days after Sony cut the rival PlayStation 3 to $299.

The price on the entry-level Xbox Arcade model will stay at $199.99, and Microsoft will phase out its mid-range Pro console, leaving it with two models. The Pro will sell for $249.99 until supplies run out. The global price cut is effective Friday.

The Xbox is the No 2 console in the US, behind Nintendo's Wii, which sells for $249. But Xbox sales have showed strength this year, up 17 percent in the US, the only console in positive territory.

Microsoft spokesman David Dennis said the price cut has been in the works for some time, and was not a response to Sony's move, which was announced last week at the Gamescom video game trade show in Cologne, Germany.

Rather, he said the company hoped the price reduction would attract new buyers and help simplify its product mix for manufacturers and retailers as well as customers.

"It really makes the decision for consumers a lot easier," he said. "They're either price conscious and they gravitate towards the Arcade or they the want the full Xbox 360 experience."    

Game publishers such as Activision Blizzard have been clamoring for console price cuts, which help boost sales of software by increasing the installed based.

They are now getting their wish, even as the industry remains mired in a months-long slump brought on by a lack of big-name releases and a recession that has pinched consumer spending. -Reuters




Tags: Microsoft | Xbox |

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