Microsoft knows console 'sweet spot' is $199
by Alexander Sliwinski 
{ Jun 8th 2007 at 8:50PM }
Bloomberg news just flowed with the good quotes today. Speaking with various Xbox executives, they got one to talk about a sales sweet spot, another to say where they really want the Xbox numbers to be, and finally, a message to the hardcore. First up was Xbox's director of product management, David Hufford, who said, "We are well aware that the sweet spot of the market is really 199 bucks.'' Knowing and doing are clearly two different things. We've been expecting an Xbox price drop to come along later this year, but there hasn't really been a clear movement in that direction just yet. And even if there is a drop, we really don't think anybody should be expecting the premium or "real" Xbox 360 to be $199 anytime soon.Another beautiful quote comes from Peter Moore, who discusses expanding the demographics of the Xbox 360, which currently resides with the 20-something male. Moore says, "If we don't make that move, make it early and expand our demographic, we will wind up in the same place as with Xbox 1, a solid business with 25 million people ... What I need is a solid business with 90 million people.'' Is that a lofty goal? You better believe it. But if that's where Moore wants to be, expect some serious changes with the console coming soon -- there's that concept of a price drop again.
Some of the changes expected are more family games, making children's titles easier to find and cutting the price. We have one more quote, which really nails home how the Wii is changing the industry with its disturbing sales march. Albert Penello, director of Xbox global marketing knocks it out of the park with, "If you don't start building that content and reputation it never comes ... I don't want to be pigeonholed as a hard-core machine.''
[Via GI.biz]
Reader Comments (Page 1 of 2)
Lewis @ Jun 8th 2007 8:57PM
Nice thinking. M$ has brains.
GodisaMyth @ Jun 8th 2007 9:03PM
How about fixing the faulty hardware 1st Mr. Moore. Can you imagine 90 360's out there RRODing themselves all over the planet? If Microsoft is running out of repair boxes now....what will they do then?
Matt B @ Jun 8th 2007 9:03PM
"I don't want to be pigeonholed as a hard-core machine.''
Too late.
Think about it. If MS and Sony turn their attention to more casual games, AAA titles will become fewer and fewer. Hardcore gamers are your target. That is why they bought your system. I'd like to hear if any 360 owner that only bought the system for the arcades on XBL.
Snukadaman @ Jun 8th 2007 9:04PM
man 200 bucks and the console war is over....but anyone thinks xbox 360 will lower to 200 bought a console that has no games and limitless potential
GodisaMyth @ Jun 8th 2007 9:04PM
90 meealeon
Jocias Zamora @ Jun 8th 2007 9:09PM
So the next question is, when should Xbox 360 start selling at or around 199? If it's not soon, don't they know that the Wii will take the targeted demographic and run with it. Maybe a ballpark timeframe?
zwarrior @ Jun 8th 2007 9:21PM
lol Cliffy B's brother was right, companies would all be following the Wii
kingofwale @ Jun 8th 2007 9:26PM
there's a HUGE difference between 'knowing' and 'doing it'.
I mean, I'm sure Microsoft also knows that people want a software that DOESN'T crash everyday or a console that doesn't die every 6 months. but are they doing anything about it? hmmmmm. *shrugs*
CleftAsunder @ Jun 8th 2007 9:33PM
You have to admit MS execs are doing a better job handling the press then sony
Killer @ Jun 8th 2007 9:32PM
@GodisaMyth
You just lost commenting privligies, for the extreme non-needed fanboyism.
nick @ Jun 8th 2007 9:37PM
Well, as soon as they drop the price I'm buying one. Hopefully it'll happen this year.
ZippyDSMlee @ Jun 8th 2007 10:00PM
the PS3 can gain ground on a 200$ 360 if they drop theres to 300-400(which they should have done from the start).
in the 200-300$ range the games would push the systems and nearly ever one would have a system and more profit off game sales.
Killer @ Jun 8th 2007 9:36PM
@kingofwale
Your Windows crashes everyday? The only thing windows has problems with is other microsoft products. 6 months it crashes? Damn I beat the norm by 4 times the amount. ^;^
David @ Jun 8th 2007 9:46PM
Hmmm, well, if there is a price drop, i'd hope the premium goes down 100 as well, cuz the core is crap. They should discontinue it. Lack of guarantee of a HD is going to make limitations for the 360 soon.
FrankTheCrank @ Jun 8th 2007 9:54PM
Give me the Premium for $249 with Free Live and I'll take it. But if I have to pay for Live, no thanks.
Live over 5 years is $250 bucks on top of the $399, making it THE most expensive console on the market, period!
Killer @ Jun 8th 2007 9:59PM
@FrankTheCrank
For me: It's $190 for 5 years and 5 months. :) There are sales on 13 months for $38. So MY console is still cheaper then the ps3. It's not my fault that some people don't find bargains before they buy things.
horngreen @ Jun 8th 2007 10:22PM
It is probably too late to get the casual crowd MS. Just offering XBLA doesn't mean anyone without a 360 knows about XBLA. They don't advertise XBLA that I am aware of and making an add on motion controller won't do it either unless you bundle it with the system. I could see MS doing that and just phuking us early adopters. You can't win the console wars just appealing to hard core gamers and they know it. If you're a hard core gamer who thinks MS should just blow off the 80 million who are not hard core gamers, well then you're an idiot.
Red Ringed @ Jun 8th 2007 10:29PM
If they can't make reliable enough hardware at $399, what kind of system can we expect to get for $199?
Get the reliability up to at least match that of your previous product, THEN chase the 65 million other new customers. First things first.
jason @ Jun 8th 2007 10:33PM
If XBOX 360 gats a $100 price drop that will be the worst thing ever for Sony if they can't come up with a price drop but why would microsoft do price drop when halo 3 is coming out soon i bet it will be a week before black friday in november or a month or 2 after january 1st.
A Mom goes into Walmart see's a $200,$300, or $380 gaming system(if there's a price drop before x-mas) for her son and picks up halo 3 or gears of war with it and buy her son more gifts.
or
Pay $660 for a game and PS3 which will she choose the 360. then theres the Wii which she could pick that up with a 360.
@FrankTheCrank
I doubt the premium will get a $150 price drop maybe $100 cuz then double then you can buy two xbox 360 premiums for the price of one PS3 or buy 3 xbox 360 core systems for the price of one PS3. Also xbox live will never be free its the premium of all gaming systems, you get constant downloaded of things like movies, movie trailers, game trailers, clips, downloaded stuff for games, picture packs, themes,spring and fall updates, demos, tv episodes and some are free, and all videos can be downloaded in HD. For example you can go to the salvation army and buy cheap clothes or you can pay for more nice clothes from hollister.
Mitt Romney's Crazy Dad @ Jun 8th 2007 10:49PM
Hey MS, want to sell 90 mil?
It's easy, here's how:
More RPG's, at least 2 a year published by MGS (where's Jade Empire 2, btw?).
2 XBL Arcade games a week (one classic, one new)
One good Mario Party clone a year for the next 3 years
Viva Pinata sequels and spin offs
Sell the 360's music player - best feature by far
Target the Hispanic community
A portable gaming device that transfers music files, video, XBL Arcade and MS published Xbox 1 games, between it and and the 360 (use the dreadful Zune DRM / 360 interface as an example on how not to do it)
Sprinkle together and you are well on your way...
kingofwale @ Jun 8th 2007 10:48PM
>There are sales on 13 months for $38.
here's the thing, do you want to still be paying 38 bucks a month AFTER your xbox gets a red ring of death? I mean, there's only one thing worse than having a broken console, it's still having to pay for a broken console. ;)
fawazr @ Jun 8th 2007 10:49PM
"Some of the changes expected are more family games, making children's titles easier to find and cutting the price."
I spend a lot of time on my Xbox Live account and I encounter more gamers younger 20 than I do older gamers. The elephant in the room is that the "hardcore" appeal rests mostly with pubescent boys. This is analogous to the appeal of 'shounen' manga and anime in Japan: fantasy of power and virility for young males who are comparatively immature and socially inept.
To widen their demographic, Microsoft should aim, instead, to appeal to gamers who don't spend most of their time fantasizing about immediately unattainable things (godly combat skills, women, wealth, etc.).
Therein lies the genius of the DS. There we have a single platform that can be used to train gamers to brush up on their stock market skills, mental dexterity, language skills, cooking skills, etc.. In essence, the DS offers a well-rounded appeal of being attractive to carnage-hungry teenage boys, mothers looking for new recipes, businessmen needing a distraction on the train ride home, or armchair scholars hoping to improve their calligraphy.
It's an uphill battle trying to shove all that appeal into the 360 without alienating the existing 11+ million owners who currently survive on a steady stream of shooters and racing titles.
Braddux @ Jun 8th 2007 10:51PM
Final Fantasy would be sweet
Smoke_Dawg_187 @ Jun 8th 2007 11:07PM
Ban FranktheCrank! He Sux!!!
joseph @ Jun 8th 2007 11:11PM
22. crazy dad...although those are good ideas...its a little much to ask dont you think.
as for jade empire 2...in case you dont know, the jade empire developer, BIOWARE, is currently working on what many are already saying could take game of the year, MASS EFFECT. an open world sci-fi squad-based shooter RPG. what a mouth full!
i think you will be more than happy with mass effect, but no, that doesnt mean they should forget about jade empire or KotoR.
as for OTHER rpgs, and those published by microsoft, look at Blue Dragon, coming out in august, and Lost Odyssey, coming out in december. both are Japanese turn basede RPGs being made by the creator of final fantasy.
Killer @ Jun 8th 2007 11:14PM
@kingofwale
You do know they give you a free month for you not being able to use it right? (or more depending on how long it takes) If I dont have my console for 2 weeks I still get a months free. That's 2 (1/2) weeks of free live.
So your logic didn't make sence.
Killer @ Jun 8th 2007 11:21PM
Also...$38 dollars a month? wtf, I'm guessing that's a typo.
kingofwale @ Jun 8th 2007 11:26PM
I don't know if xbox can EVER sell in Japan, They've tried with Blue Dragon and it still couldn't sell much console. Unless you see Microsoft hostletaking over Enix, I don't see them ever selling at all.
so, with Japan lost, Microsoft MUST work hard in European front. A console that doesn't break would be a GREAT start. Price is really second here.
poster @ Jun 9th 2007 12:45AM
Love how ever since the ps3 came out, people talk about how they refuse to pay for live, and how ps3 is a much better value since you don't have to pay for the online etc. You realize Sony made it free because it sucks so badly? They couldn't charge for such an abysmal service. Nobody really complained much before ps3 came out, but ever since people act like you can ever compare ps3's online with xbox live. You just can't. One is thousands times better then the other.
Killer @ Jun 8th 2007 11:50PM
@kingofwale
Ofcourse the Xbox won't EVER sell in Japan. It's no long made and it's last-gen. lol ;-)
REUYL @ Jun 8th 2007 11:54PM
A price drop will come after they switch to using 65nm-fabbed processors. More efficient production = price drop.
jorojoserojas @ Jun 8th 2007 11:55PM
I think targeting a new demographic is a great idea, on multiple fronts. The first (and most obvious) is that Microsoft gains more customers. With more customers, we see more games. With more games, comes more ideas. See where I'm going with this?
BUT, I won't see any of the money that Microsoft makes...so why endorse it?
I think getting more people into video games (yes, even casual ones) will make HUGE STRIDES to getting gaming the respect it needs. Too many people see this as an immature or childish pasttime. A toy. If you get more people playing, it will help bring down that image, and really lift gaming into what it has always been, what everyone here already knows; a great form of entertainment.
Killer @ Jun 8th 2007 11:56PM
@kingofwale
I'm more interested in how japan will take Mass Effect, Bioshock, and Lost Odyssey. Mass Effect probally being a big one. It's literally the RPG of all time. I'm not sure if microsoft will ever get a strong base in japan. Somehow though with microsoft trying to it's make gaming better for all the other regions. If it wasn't for japan being a struggle, we wouldn't have Blue Dragon or Lost Odyssey and many others in the future.
Killer @ Jun 8th 2007 11:59PM
Edit:*Soon to be*
poster @ Jun 9th 2007 12:48AM
and kingofwale, please stop acting like your beloved ps3 is selling well in japan in comparison to 360. 6000 more units a month is not even worth gloating about, both systems are selling terribly. Don't act like ps3 has won japan, it's selling just as badly.
jorojoserojas @ Jun 9th 2007 12:53AM
Yeah, Live is a better service right now. But I'm kind of pumped up for Home. If it works well, I may be interested in a PS3.
Of course, that means no Halo 3 for me. Damn it! Decisions, decisions...
Diskoboy @ Jun 9th 2007 1:17AM
I'll bet dollars to doughnuts that about 2 weeks to a month before Halo 3 comes out, we'll see that price drop.
Then MS can sit back and watch 360 sales go through the roof.
jorojoserojas @ Jun 9th 2007 1:26AM
Oooo...good point Diskoboy...I didn't even think of that. That would be a genius move on Microsoft's part.
But then, it IS Halo 3...I don't think they would really NEED a price drop to sell systems like crazy.
But if it happens, I just may be swayed...I've been debating this whole PS3 vs. 360 thing since the two were freakin' announced, and I STILL can't decide!
GodisaMyth @ Jun 9th 2007 2:43AM
Most of the people who want Halo 3 probably already have 360's. I do not think that this game will move many new systems. When Halo 2 released, there was not a flood of new buyers just for that game. Of course it was the 4th quarter, so there were more systems being bought, but no real change from 2003.
@Killer,
Why is what I said in my 1st post extreme non-needed fanboyism?
I asked a question that Microsoft needs to address now. They are running out of repair boxes and can hardly keep up with all of the repairs for the RROD. So, if they want 90million+_360's out in the wild...they better do something about the RROD or there will be mass chaos.
Slvrgun @ Jun 9th 2007 2:45AM
Here Microsoft I can give you some great advice.
First off realize at this point that in order to prevent the Wii from completely dominating this generation that you are going to have to lower the price to at least $300 (Premium) and $249 (Core).
We all know you've got a load of great content coming out i.e. regular games like Halo 3, Bioshock, Mass Effect, Blue Dragon, etc and great XBLA titles like Street Fighter 2 HD, Sonic 2, Castle Crashers, Streets of Rage, etc, but for God's sake you have to advertise! Nobody really knows about all the great games you can play on XBLA. You see what Nintendo is doing: they have commercials of people who look like they are having fun waggling to mini games. Look at their commercials as a good way to get people excited. Don't make them think too much like Sony is doing with their retarded commercials, just get people off the couches and into the stores.
Lower the price on some of the games. Sixty bucks is too much. And, start a family line of games with prices ranging from $20 to $35. People want bargains! Give it too them. But don't get lazy and make the lower priced games crappy. Focus and make something interesting on a low budget. It doesn't have to have GOW graphics. Just make it fun.
Advertise the capabilites of your Box. Most people don't know that the Xbox 360 makes an excellent media streamer. Show people that, it is what everyone should have in their living room. And since, everything is moving to on demand type services, create some sort of pass or Live Marketplace Membership. Many people whould love to rent, say 10 movies a month, or watch our favorite episodes that we missed for a yearly fee of lets say $60 to $70. You could call it a Platinum Membership. Hell, just get creative. Note please Microsoft, get rid of MS Points. If you want a wide audience, and you want their money, make the money spending experience easy to understand. Nobody wants to spend time converting points to dollars in their head.
Roll out that IPTV service out and show just how much Microsoft is ahead of the game. Give the consumer loads of information, explain how it will outdo existing cable, etc.
And as much as I don't care about this: implement a browser blade. You could secretly try that WEBTV experiment out again, this time without the monthly fee. People like to browse, give it to them.
Last but least, just be more aggressive. The Xbox 360 has some of the greatest software/hardware combination of this generation. Show people just how good it is, and take Nintendo SERIOUSLY. Its not just Sony that you should be concerned about, because Nintendo looks like they are trying to sneak a WIN in with their 7 year old hardware. Show them who's boss.
syco @ Jun 9th 2007 3:09AM
Actually the Wii's hardware is rather advanced. I highly doubt Microsoft could put the hardware in the 360 in a box as small and durable as the Wii, or make it as energy efficient. Just because it's more graphically modest doesn't mean it's 7 year old tech. It's based on the Cube hardware, but by that reasoning Core 2 Duo's are 20 year old tech (the first x86 chips came out in 1985)
syco @ Jun 9th 2007 3:11AM
eh, I was wrong, the first x86 chip (the 8086) came out in 1978. The first 32bit one (the 386) came out n 1985.
Ihar `Philips` Filipau @ Jun 9th 2007 5:07AM
> Is that a lofty goal? You better believe it.
/me dreaming of xbox360 with waggle control.
No seriously.
Presume that M$ would license WiiMote at $40. They have games studios on board which can bring simple intuitive games in quickly. They have one of the best on-line shops already - Game Arcade it was? - with steady sales and many games.
Say, WiiMote at $40 x 2, some simple party game at $10-20 ~ $100. I think that is not bad. (And if people already have both Wii and Xbox360 - that would be only proce of game for 360.)
/me already dreaming about waggle patch for GeOW :)~
P.S. Assuming that Xbox360 has Bluetooth of course.
ThornedVenom @ Jun 9th 2007 6:11AM
$200 for an Xbox 360 Premium and I will be SERIOUSLY considering getting myself it, despite all of the reported crashes (as in getting ready to face Microsoft's customer service).
Unless the Wii cost $100 when that time arrives... just like the Gamecube did. xD (in France, the Gamecube cost 99€ after a mega-bomb price drop)
t_m @ Jun 9th 2007 9:27AM
So, paraphrasing: "Nintendo got it right, they got all the customers, and all we got were these stupid 12 year old halo fanboys!! :-("
??
mike @ Jun 9th 2007 10:15AM
Yes, slashing prices and putting some motion sensing wand would be a great idea, as Bill Gates described in his recent gaff at the D5 conference.
Fuck it, just call it the MS Wee and get it over with.
PS.Shareholders wanna know, when's this dog gonna make a profit?
FrankTheCrank @ Jun 9th 2007 10:55AM
This sounds like the core will probably be at the $199 level, since it's only $249 now and the premie will be at $299 before Christmas.
GUARANTEED!
Still, LIVE at $50/year is too much. Drop it to $25. That's sounds like a better deal.
FrankTheCrank @ Jun 9th 2007 11:02AM
@46 - mike
Seriously, XBOX as a whole, XBOX and XBOX360 have not made one penny of profit. It's crazy and unimaginable. Any other company would have been dead and buried. Microsoft could pull the plug on this anyday and just trash the entire XBOX franchise. It would not impact their bottom line. It would be like a mosquito on the ass of a hippo. That's how loaded they are.
It's nice to have a monopoly on PC's and Office applications.
Phillip @ Jun 9th 2007 11:08AM
Wait, so it this "sweet spot of the market" referring to the price for the XBox or for Halo 3?
GWolf @ Jun 9th 2007 11:32AM
When the 65NM chips come in the reliability of the 360 will increase significantly and the cost of production will decrease. A price cut just before halo comes out would be a brilliant move for MS.
One thing you can say for Microsoft, they are very smart businessmen and women.