Rumor: new, cheaper Xbox 360 this holiday
by James Ransom-Wiley 
{ Jun 20th 2006 at 11:25AM }
According to Britxbox.co.uk, a source close to Microsoft has confirmed plans to cut the cost of Xbox 360 as the holidays roll around, and more importantly, just as Sony unleashes the PlayStation 3. The source told Britxbox that the price cut would be the result of a "new" and "cheaper to manufacture" version of Xbox 360, suggesting that the Xbox team is working to redesign elements of the chip set supplied by ATI and IBM to achieve more cost effective production.But, just as Peter Moore told us at CES, PlayStation 3 will sell out at launch no matter how much Microsoft reduces -- and releases. That's not to say that an Xbox 360 price slash wouldn't help Microsoft's standings in the long run.
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Reader Comments (Page 1 of 2)
cyrix_0 @ Jun 20th 2006 11:30AM
YOU WISH...
HIGHLY DOUBT it...
Even if true it does not Look good for a System just been out for less than a year..
Izuna Drop @ Jun 20th 2006 11:32AM
This would be a heavy blow to the PS3. It will, as stated, still sell out, but a lower 360 price will put it in quite a few households.
cyrix_0 @ Jun 20th 2006 11:32AM
Like MS gona take a HIT on there return in hope for more sales...
This is to Cut COST of PRODUCTION of an Xbox360...
Not a decrease in Retail Price of a Xbox360...
So relax...
RTi @ Jun 20th 2006 11:33AM
That wouldn't suprise me at all.
360 sales in North America only just surpassed 1.7 million at the end of May (7th month of sales). (Compare to XBox1 which had sold 1.5 million by first Christmas).
http://biz.gamedaily.com/industry/feature/?id=12922&rp=49
And the analysts in the article are actually predicting that 360 sales will go down or stay this low.
And given that sales in Japan are at around 5,000 units PER MONTH.
http://www.the-magicbox.com/topten.htm
I would say that a price drop is warranted....
Izuna Drop @ Jun 20th 2006 11:33AM
That is a smart move for Microsoft.
AssemblyLineHuman @ Jun 20th 2006 11:33AM
Unless it's not possible, it only seems like a natural move for Microsoft to cut the price of the 360 for the PS3 launch. If the PS3 is (almost) twice as much as the next most expensive game console, that certainly won't look good for Sony, even if they do think "the Playstation 3 is a computer."
Also, with Moore's recent comments about the Wii and the 360 controller ( http://www.xbox360fanboy.com/2006/06/19/moore-360-controls-a-wii-bit-complicated/ ), am I the only one who is starting to get the feeling that Microsoft is working on a motion sensitive controller to include in the newly-price-cutted package?
Jason W @ Jun 20th 2006 11:34AM
I would like one with a built in HDDVD option.
As for the new cheaper version, its about right. Most systems have yearly step downs. Now how far down it is will determine if it makes a large difference. Only the PSP has not had a yearly step down and it is due for one. Cutting bundled crap does not count.
Imagine in a few years if the 360 could become the size of the ps slim line. That console still trips me out with how small it is.
madgamer @ Jun 20th 2006 11:34AM
I hope so.. although I won't be getting a 360 until next year.. Gonna need lots of money for a new PC (or Mac) and a Wii with at least 2 games. A redesign sounds cool maybe they can internalize the power supply? Hey, one can dream :P
Brian @ Jun 20th 2006 11:36AM
No way this happens BEFORE the holidays, especially considering it'll likely be difficult to find PS3's or Wii's on the shelves.
If Microsoft finds a way to make a "new" and "cheaper to manufacture" Xbox 360, then they'll just lose less money per console sold than they are now.
Tom @ Jun 20th 2006 11:38AM
This is the advantage of 'first to market'... which ended up being even longer than expected with sony pushing it's release even further back. Sony will sell out it's initial production... but in the long haul it's going to be a tough thing for buyers when you can get a console with great games and a tested online service for 1/2 the price. Especially for parents buying these for their kids. And especially when Bluray starts to go the way of Betamax.
Canadian Geese @ Jun 20th 2006 11:42AM
This rumor has been popping up for a while now. I think it is very possible.
Microsoft would not publically announce a price drop until the last second, for fear that too many people would hold out on buying a 360 until the price drops. I highly expect MS to blow off this rumor by not taking a difinitive stance on the subject.
However, I think this rumor is highly likely to happen. MS has a very clear goal of taking a larger share of the gaming market and is willing to lose some money in the process. With price being in the spotlight, it would make sense to continue on the customer-focused road they've been traveling on. I'm confident that MS has found cheaper ways of making the product, and as time goes on, 3rd party hardware providers will charge less as the lifecycle of said hardware progresses.
I wouldn't be surprised at all to see a price drop. The money is in software sales, anyways.
GamerG @ Jun 20th 2006 11:49AM
I doubt you will see much of a reduction MS will use the any additional profit margin to encourage retailers to put together bundles.
This would mean you could have a $299 core 360 with a 3 games and a memory card quite easily and will be very tempting for parents this xmas, especially if they can get hold of or afford a PS3.
MS target this christmas will be to have plenty of 360's available so they can soak up as much of the rush as possible.
tomato @ Jun 20th 2006 11:54AM
I seriously doubt that Microsoft will drop the price this holiday season. The PS3 is going to be released at $200 over the price of the XBox360. I don't think Microsoft really sees them as a major threat. The only people who are going to buy a PS3 at release are hardcore Sony fans. Everyone else will pick up an XBox360 for $200 less. Basically, there is no need for a price drop. The reality is that Microsoft is a business. They have already lost $4 billion on the XBox to get into the market. They are looking to make some money this round (and I think they will).
RazorElite @ Jun 20th 2006 11:55AM
Even though it's not truly needed, imagine what that would do to Sony. A system with 10x more games, half the price, virtually the same technology and would have all bugs sorted out at Christmas time compared to the PS3. I think that would seriously do well for MS. I know of a lot of people who are simply waiting for a price drop to get their 360. Either that, or Halo 3.
Felix Andrews @ Jun 20th 2006 11:58AM
This is too good an opportunity for Microsoft NOT to instigate a pricecut.
£425 for a PS3: Pricey, and unless you're a serious fanboy/tech-head, difficult to justify.
Premium Xbox 360 at £250, £200, that sort of region (they're currently £300 in the UK), with an already strong software lineup and looming second-generation titles: irresistable, and getting tantalisingly close to the £130-£170 pricetag that Wii will inevitably carry.
It's a no-brainer. If MSoft doesn't do this, especially given these new alleged cost-cutting design choices, they are absolutely insane.
Dr. Tubesteak @ Jun 20th 2006 12:00PM
Remember, the sales of the 360 have been impacted by the supply problems that Microsoft experienced since launch. If there were enough consoles available there is no doubt that it would have sold 1.7 million in the first month alone. Coupled with the fact that sales will slump over the summer and with no great releases until August (Dead Reckoning) in my opinion, the is completely logical. Also, remember that this is only sales in the U.S. the does not reflect Europe, Japan(shitty) and the new markets Microsoft is opening up to (which will probably lead to more supply problems).
Wait for all consoles to combine to have record sales for the holiday season with the PS3 (selling out short supply over wins out over people who care about the price), Wii (rabid fan boys and people wanting to see what the hopes and dreams of Nintendo are pinned on, plus great marketing), and Microsoft (huge games, lower price, console already established, first look into the reality of true entrance of next-gen games, and hopefully more than enough supply). It's going to be a amazing time.
Amos @ Jun 20th 2006 12:03PM
Sure, it's only a rumour without much evidence, but if Msoft DID cut the price, the 360 would simply tear into the market with the massively priced competitor. It would be a smart business move, IMO, since Msoft is still trying to win market share, rather than gross profit sales.
cubbiechris @ Jun 20th 2006 12:09PM
Seems to me this is another blow to Sony. Why in the world would you buy a PS3 that is 300-400 more dollars? Make no sense! Don't give me all because of Blu-Ray. I perfer to wait out the whole Blu-Ray Vs. HD-DVD before I buy either one of those.
jaemz @ Jun 20th 2006 12:10PM
I would rather see the games drop in price... but I might just be saying that because I already have a X360.
I suspect we will see a console price drop for December... I know many people that are holding out until then.
ashmufc @ Jun 20th 2006 12:11PM
By holiday is that Summer Holiday or Christmas holiday people?
PeteL @ Jun 20th 2006 12:12PM
I remember reading even before launch that a yearly price drop was planned for the 360.
Perhaps no price drop is needed this holiday season with respect to PS3. But no matter what Peter Moore says, they are still competing with the Nintendo Wii. If the Wii is in scarce supply, a similarly priced 360 could be a subsititute for holiday console shoppers. Parents looking for Wii. None in stock. Yes, but here is the more powerful xbox 360 for the same price. Yes, it plays kids games - look here's Viva Pinata!
Clint @ Jun 20th 2006 12:15PM
They need to do something to sell the pitiful thing. Everyboyd who wants one already bought it. Judging by their lame ass sales, it's going to need a huge price drop or two.
sev4 pri1 @ Jun 20th 2006 12:15PM
A return to 80's manufacturer bundling would be a great move for the holidays. There was a day when the included extras influenced the market. Nintendo comes with Super Mario AND Duckhunt? Master System has hang on built in?
MS would be silly to keep the current price scheme if they can drop them $50 this Christmas. Lets not forget that early adoptor parent$ will be looking to PS3 and its amazing BD player and "computer" features.
Rory W. @ Jun 20th 2006 12:16PM
I have no sources for this, by I heard about this price drop already
1.) Core from $299 - $219
2.) Premium from $399-$299
soco @ Jun 20th 2006 12:17PM
so long as it's selling well, like it is now, and they have a kick-ass holiday lineup, as it appears they might very well have, i don't see them reducing it by much, if at all. i could see them reducing the price of the original launch titles though, and maybe making a few game bundles like Kameo+Premium 360 for 420USD. or Kameo&PDZ&Premium 360 for 450$.
Will @ Jun 20th 2006 12:17PM
I think there will be a price drop, but I think it'll be $50 max, and probably more like $25. I'm betting Microsoft just wants to get comfortably in the $200 and $300 range. When people see a $350 or $375 system, they probably won't make the round up to $400. Instead they'll think of it as $300 and some. When people see the $599 PS3, they're going to look at it like $600. I think Microsoft just wants to create as large of a difference in perception of the prices as possible without really lowering the price that much.
Exick @ Jun 20th 2006 12:18PM
I'm definitely buying a Wii at launch, but an Xbox 360 price cut could be enough to convince me to buy one of those as well. Maybe. Right now it sounds like GTA IV is going to be the system seller for me and that's not until next year.
Joe Smith @ Jun 20th 2006 12:24PM
Hard to see why they would bother dropping price until they have to. If the machine is still selling and the PS3 is way over the Xbox 360 asking, there isn't much reason to cut -- unless they are concerned about the Wii (still hate that name). Seem spretty unlikely that they would tip their hand this early to anyone anyway. Do I believe they are cutting costs? Yes. Do I think they are prepared to drop price if htey have to? Yes. Do I believe they told some wanker about it this early thus guaranteeing a leak? No way.
the_game_master @ Jun 20th 2006 12:29PM
Thanksgiving Holiday Prices 2006(prediction)
Xbox 360 Core $249
Xbox 360 Premium $299
memory controller card $29
Controller (wireless) $39
Controller (wired)$29
HDD accessory $49
Games $49
Wii $199
Wii extra remote $49
Wii extra controller $29
Games $49
PlayStation 3 60GB $599
PlayStation 3 20GB $499
controller (wired) $39
controller (wireless) $49
Games $69
kevin @ Jun 20th 2006 12:35PM
The Xbox name itself should go down as one of the biggest technological flops of the century. It might have been in a small percentage of households and sold, but it lost 4 billion dollars and it's tanking even further.
I do own an Xbox and a 360. The only game I own so far is Halo2 and GeometryWars. See my drift?
ck @ Jun 20th 2006 12:39PM
If they drop the price even $50, I might just have to pick a 360 up along with a Wii. I'm thinking of all the cool exclusive titles coming to the 360 in the next year:
Alan Wake, Gears of War, Prey, Bioshock, Mass Effect, Too Human, Lost Planet, Viva Pinata - I mean these look like titles that will be good if not great (And some of those I cannot possibly play on my aging PC). I can't really say anything for the PS3, because none of the games previewed were really playable...except heavenly sword, and that isn't enough for me to spend $600+ on a one- or two-game system. I'll definitely wait for the eventual slimmed-down, redesigned and inexpensive version of the ps3 to come out.
TxdoHawk @ Jun 20th 2006 12:46PM
A holiday price drop? It could happen, but it's tough to say. Yes, if MS slashes the price, they will probably get a nice boost to holiday sales. But knowing full well the PS3 will sell out, perhaps MS would rather wait until after Xmas?
As others have alluded to, all the consoles are going to sell well around that time, simply because it's going to be the holiday season. Then factor in dissapointed shoppers who can't get a PS3 and go 360 instead. Those factors alone could potentially equal a lot of 360 sales this holiday season. MS can then drop the price around January, and enjoy a second spike in sales, as the people with spending money from holiday cards and gift returns chomping at the bit for a price drop all jump in.
There's no doubt that a 360 price drop will be effective. Look at the sale Overstock had on premiums. They offered them at ~$340 after coupons twice this month, both times they sold out quickly. Then they offered them at $360 after coupons and they still sold through their stock in rapid speed. Highly suggestive evidence that even a small price drop could seriously spur sales. The only question is, when is the right time?
jabbertrack @ Jun 20th 2006 12:49PM
the_game_master -
don't hog all the drugs man... pass me whatever you're having
r-deezy @ Jun 20th 2006 12:54PM
I think it would be silly not to drop their prices. It's not going down $100 like the_game_master predicted above, but i fully expect around a $50 slice.
I think Nintendo has to expect a MS price drop as well and it will force them to come out at no more than $200. Unless a $250 price point includes 2 Wiimotes/nunchucks and a game.
Jesse @ Jun 20th 2006 12:54PM
I'd buy it, but I'm getting Wii!!!!!!!!!!!
Jesseg2211 @ Jun 20th 2006 12:55PM
I'm getting ze Wii.
PaleGringo @ Jun 20th 2006 12:55PM
Here's a second source for the "rumor."
http://www.news4gamers.com/xbox360/News-2492.aspx
I think that a $100 price drop is pretty steep. I'd imagine you'd see a $50 "price drop" and possibly bundling it with a bestseller game like Oblivion or Gears of War would be more plausible.
Darth Pixel @ Jun 20th 2006 1:01PM
Xbox 360: 1.7M sold at the end of may in the US.
Japan is not a factor.
Europe certainly did not buy it more than the US.
So, at most, 4M sold at the end of May.
No system-selling game will be released until October or November.
How does Microsoft intend to keep selling Xbox 360?
As it stands today, Xbox 360 looks more and more like a sales flop.
It's a great, powerful machine, but it underdelivers consistently. Yes, all AAA games so far had enormous frame rate issues. It makes you wonder where the problem is. Is it the hardware? Is it Microsoft's software?
In any case, this rumor seems to imply Microsoft will cut some corners in order to reduce their manufacturing costs.
So, it might get cheaper, but will it sell better?
Cutting corners is tricky.
Thomas @ Jun 20th 2006 1:02PM
no way! M$ is never going to lower the price of that system $100, r u insane!?
Thomas @ Jun 20th 2006 1:03PM
like #25 said, $50 max...
Raikage @ Jun 20th 2006 1:07PM
@ 27 LOL
No way is the Premium 360 going to drop $100. Also the games droping in price seems unlikely because that's where MS (and all other consoles) make money. Controlers most almost never drop in price (although I'm worried that Wiimotes are gonna cost quite a bit)
The Wii for $199 is reasonable, but I still think they need to lower the price to $149 (somehow) to get the mass market appeal that they want. Maybe a two-teir (sp?) pricing is what they need (I can't believe I typed that). I think two prices are really stupid but if they had the console, Wiimote, and Wii Sports(No way that game could sell for $49 so just bundle it) for $149 would be a killer deal for parents. And for us reading Joystiq...maybe $249 for the console, 2 Wiimotes, Wii Sports, a decent size SD card(1GB?), Classic game pad, and 5-10 free VC downloads.
Your PS3 predictions seem right on...
P.S. Hopeing for that $249 deal XD
The Raikage
Pretty Obvious @ Jun 20th 2006 1:15PM
As of right now Microsoft already has an advantage over Sony. Cheaper console, better lineup of games.
Dont forget, this is Microsoft. In order to gain market share they will cut costs and take a loss. So I see a price cut happening this Nov and the HD-Dvd drive coming out at the same time.
For the first time Sony looks to flop with its $600 Foreman Grill. Which will only sell out day one because of the massive shortages theyll have trying to produce them.
You want real next-gen, get a 360. You want a different way to play, get a Wii. Hell getting both will still be cheaper then a PS3.
Robotic House Plant @ Jun 20th 2006 1:26PM
Microsoft would miss a great opportunity if it did not seriously look at a price cut or some sort of new bundle by the time the PS3 and WII are introduced.
I'm surprised no one considered a 'rebate' option. Buy at full price, and get a mail-in rebate for X amount off.
vidGuy @ Jun 20th 2006 1:27PM
The 360 is going to sell like crazy this holiday season. Reason: large supply finally ready to meet holiday demand. MS doesn't need to drop the price... they could just about raise the price and the thing will all but sell out for Christmas.
Making the 360 cheaper to produce is best for the company: they cut away some loss while building a bigger customer base. They won't pass on this opportunity, so I don't expect them to drop the price along with the cost right away.
If the 360 is going to have a price drop, it won't be till mid Jan / early Feb. By that time, the Wii and PS3 will be between supply shipments and the 360 could make a killing drop $50.
I'll edit game masters' pricing chart to my prediction:
Holiday Season -
Xbox 360 Core $299
Xbox 360 Premium $399
Games $39 - $59
Wii $199
Wii extra remote+nunchuck $39
Games $39 - $49
PlayStation 3 60GB $599
PlayStation 3 20GB $499
controller (wired) $39
controller (wireless) $49
Games $59 - $69
By Feb -
Xbox 360 Core $249
Xbox 360 Premium $349
Games $39 - $59
DinnyHoon @ Jun 20th 2006 1:35PM
Every console news turns into a fanboy battle. This is a comments page, not FlameForums.org...
Darth Pixel @ Jun 20th 2006 1:37PM
Xbox 360, only 3 games worth talking about:
1. The Elder Scrolls IV: Oblivion
2. Tom Clancy's Ghost Recon Advanced Warfighter
3. Call of Duty 2
Those are the only games that scored more than 90% at Game Rankings.
All 3 games have enormous frame rate problems.
Oblivion is single player only, GRAW and COD 2 lag like Hell on Xbox Live.
With Xbox and Xbox 360, the story is always the same: "Great games are coming!"
Later, it's "Great games are still coming!".
Then, "It's delayed, but it's great and it's coming!".
Finally, the game comes out and it's a lame duck that gets forgotten within a week.
This pattern repeats and repeats and repeats.
Microsoft needs to understand Hype is not a game title that sells hardware.
If you care about games vs. hardware, Xbox 360 may not be an option.
vidGuy @ Jun 20th 2006 1:42PM
Raikage,
I agree. Nintendo should jump on board with a package deal - they've done it before.
But that $249 deal is stretching it, I think, unless the console is super-cheap to produce (think $30 or less from launch) because of the cost of the other components. Remember, Nintendo makes money on the sale of its hardware.
What I'd like to see, and half-what expect, is this
$199 Wii Starter Pack
Wii console
2 remotes+nunchucks
Wii Sports
$249 Wii Starter Plus Retro Gaming
Wii console
2 remotes+nunchucks
Wii Sports
VC controller
512 MB card ("Double the Wii's storage!")
I include Wii Sports and two controller setups because of the emphasis Nintendo has put on the introduction-to-the-Wii nature and multiplayer fun of Wii Sports. If it isn't packaged with the console, I expect it to sell for $19.99 in order to grab as many consumers as possible.
With the second package, you double the storage capacity for all those retro game downloads and get the classic controller, for an amount that is roughly equal to or only slightly more than the price of a 512MB SD card.
Needless to say, the second package would probably sell like crazy thanks to the market appeal of the Virtual Console.
lostzenfound @ Jun 20th 2006 1:46PM
Do you guys even listen to the careful wording in the article ??? The 'PRICE' of the 360 will remain the same. The production 'COST' is going down. Joystiq is partly to blame for getting you people all riled up, but the truth is that they're going to be using a new kind of chipset in the 360 that reduces production cost. ... and the 'NEWER' statement, is only justified because the new chipset will also reduce the overheating issues of the 360.
Stop 'predicting' that a premium 360 is going to cost any less than $399. If you want to predict anything, predict that Microsoft may decide to sell the HD-DVD drive in a 360 Bundle, for a slightly discounted price. That at least, is semi-realistic.
Thomas @ Jun 20th 2006 2:27PM
..."According to Britxbox.co.uk, a source close to Microsoft has confirmed plans to cut the cost of Xbox 360 as the holidays roll around...", I'm pretty sure that's not talkin about the cost to M$, it's talkin about the price, why else would they mention the holiday season??
brigadeer @ Jun 20th 2006 2:27PM
#26 hit the nail exactly on the head. Microsoft is just looking to create a bigger difference in price between the PS3 as it can, especially in perception. $249.99 suddenly looks like $200 as opposed to the current core price of $299.99 that looks like $300. $50 difference either way, but the perception of the consumer makes it looks like much more.