Microsoft Slashes Price of Xbox 360 Elite
Microsoft plans on cutting the prices of its Xbox 360 Elite and Xbox 360 Pro gaming systems, following Sony's decision to cut the price of its own PlayStation 3. Despite Microsoft's renewed focus on its traditional lines of business in the midst of a global recession, including the release of Windows 7 in October, the company's Xbox 360 division has continued to be profitable. The Xbox 360 line has sold 31.4 million units since its release.Microsoft plans to slash the price of its Xbox 360 Elite gaming system from $399 to $299 on Aug. 28, as part of a product-line restructuring that will see the Xbox 360 Pro discontinued once those units sell out.
In order to rapidly reduce their stock of Xbox 360 Pro consoles, Microsoft has lowered the unit price to $249. Eventually, Microsoft will offer only the Xbox 360 Pro and the Xbox 360 Arcade, which retails for $199 and lacks a hard drive.
The Xbox 360 price cuts follow its arch-rival Sony's decision to drop the price of its own PlayStation 3 console to $299 for the 120GB edition. A 160GB edition will sell for $399. Analysts have generally concurred that Sony made that pricing move in order to make its pricey console more competitive with both the Xbox 360 and the Wii, which sell for less.
Revenues from video games, whose prices have only increased in recent years, may also help Microsoft at least marginally offset potential future losses from traditionally profitable platforms such as Microsoft Office, whose latest iteration will be offered as a stripped-down free service to Microsoft Live subscribers.