Xbox 360 to cut PS3 at retail[/size]
A year is a long time in the videogames industry; twelve months to build recognition of your brand name, 365 days to reinforce an installed user base and time enough to look forward to what the increased profit margins can allow you to do.
For Microsoft’s Robbie Bach, President of Entertainment and Devices, the question now is how to rally the Xbox 360’s second year of life against the incoming offensive of their greatest rivals in the next-gen battle, Sony. The answer is simple – go where the competition cannot...
"Right now we are thinking about how to cost reduce the Xbox 360. That seems to be the first order of business." After months of rumour and speculation, the Microsoft Exec confirmed in an interview with Next-gen.biz that a price cut for the Xbox 360 is coming, and it’s all due to amazing success of the company’s second console in retail.
"Because we were out there first, we have a bigger installed base of consoles," Bach commented. "We can drive down the manufacturing curve sooner and faster. And because we designed a box that was fundamentally easier to manage on costs, we’re going to have that advantage." The year’s head start has not only given the company a massive winter line up, including titles such as Gears of War, Rainbow Six Vegas and Lost Planet, but it has also presented Microsoft with the opportunity to undercut Sony’s retail price point of £549.99 even further, thanks to a cheaper manufacturing costs.
That fact has been picked up by US technology analyst iSuppli, whose findings, published this week, calculated that the Xbox 360 was the most cost effective system on the market, costing $323.90 to produce, while the unit sells for $399.99. The PS3 in comparison costs Sony $805.35 to make, more than $200 than its official US retail price.
With Sony suffering such massive losses on every machine it makes, its very unlikely that the company will, or can, reduce the price of the PS3 for a long time to come. As Bach suggested, "you have look at the economics. You have to ask the question, over the life cycle, who has the cost advantage? Who can price most effectively? Who can reach the price points quicker? That has a huge impact on what gets driven."
While the eventual price drop hasn’t had a date tagged to it, we’d suspect that sometime around the Playstation 3’s launch in March next year could be a winning bet. Either way, it seems Xbox 360 has struck another blow against Sony’s black beats before it even hits these shores.
Sen
Topic: Xbox 360 price drop (Read 519 times)