Microsoft planning a $100 Xbox 360 price drop?

Source: An article on Digitimes.com, citing Microsoft manufacturing partners in Taiwan. The official story: Microsoft rep--"We have nothing to announce at this time." What we heard: Console pricing has been a big topic in the next-gen system wars. Those who gasped when Microsoft revealed that its...

Source: An article on Digitimes.com, citing Microsoft manufacturing partners in Taiwan.

The official story: Microsoft rep--"We have nothing to announce at this time."

What we heard: Console pricing has been a big topic in the next-gen system wars. Those who gasped when Microsoft revealed that its premium Xbox 360 would retail for $399 probably swallowed their tongues when Sony announced its high-end PlayStation 3 would sell for $599. Nintendo's Wii, on the other hand, is targeting a price under $250.

Microsoft has found itself conveniently in the middle of the pack price-wise, offering better graphics and power than the cheaper Wii, and fewer bells and whistles (such as a Blu-ray drive) than the pricier PS3. However, with gamers all over the world still undecided about which console to take home for the holidays, Microsoft may want to sweeten the deal.

Taiwanese tech site Digitimes.com is reporting that Microsoft may cut the price of the Xbox 360's premium pack by $100, bringing it down to $299. The article cites Taiwanese OEM component makers, companies that are making parts for the Xbox 360, which claim to have negotiated deals with Microsoft to reduce production costs by as much as 20 percent. The cut in costs is attributed to increased production, decreasing rate of defective parts, and general price deflation of raw materials.

The purpose and timing of the alleged price cut is obvious--with Sony taking a lashing of criticism because of its $599 PS3 price point, Microsoft would love to turn up the heat on its main rival. Microsoft didn't launch the 360 a year early to come in second or third place again, and with its willingness to lose boatloads of cash to be the winner in the long run, a price cut could be the extra boost the 360 needs to come out on top.

Digitimes' source also says the price cut is in preparation for a $399 Xbox 360 premium bundle with an external HD-DVD drive, in an attempt to blunt Sony's Blu-ray drive-equipped PS3. At E3, Microsoft announced that the drive would be available this holiday season (but didn't announce a price), which would line up perfectly for a holiday bundle.

Don't run out and buy Van Helsing on HD-DVD just yet. Microsoft has previously said that no price drop on its console is planned this year, and it may tough out this holiday season with its previous price points intact. Another possibility is that Microsoft will announce some form of bundle with throw-ins, like the rumored $399 Project Gotham Racing 3 bundle, which allegedly includes the premium 360, PGR3, some Xbox Live Marketplace points, and a three-month Xbox Live account.

Bogus or not bogus?: Being the high-def film junkies we are, we're hoping it's not bogus. Unfortunately, the PGR3 bundle seems like a more likely scenario. Bogus.

Got a news tip or want to contact us directly? Email news@gamespot.com

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261 comments
blancobo
blancobo

I am waiting on that price drop! I am a Sony fan, eager to get an XBox 360 and get Halo, Halo II, Halo!!! and Gears of War. So much noise from the Xbox has made me drool over the MSoft Next Gen Console potential. During this next gen race, I will pair the both systems and beat the Wii 3 to 1! Wii fans, please dont be angry. I was a NES fan back in my teens!!

maccie05
maccie05

well i got my original xbox for

HEYHEYHEY67
HEYHEYHEY67

Microsoft wont drop the price of the X-box 360 due too the fact every Playstation Three and Nintendo Wii will be sold out. Forceing parents to buy the X-box 360 , Microsoft is going to be rolling in the dough with the X-box 360 and Vista.

edmakel
edmakel

The price war thing is played and dated......$100 bones really won't matter at this stage of the game. A true player/ gamer Already put aside 1000 bones to cop both systems. Lets face it. MGS is a great franchise.....and I know i'm waiting for Halo 3 to drop just like Im waiting for spider man 3 to hit the silver screen. I like the PC titles that pop up on the 360 (no keyboard fuss) and let's be real.......you know you want Blu-Ray!..Heck the name sounds hype! Not to mention the added storage capacity and x-tra's those disc will come with..... Step outside your fanboyizim for a peace and recognize the true nature of gaming......playing the game playa.... At times we give the big 3 too much credit for hardware when the software developers can make or break a system. I bought a 06 vette recentely....nice ride (I know) but what if I put diesel in the tank? right!......same goes for software. Start showing some love to Bungie, Activision, Bio-Ware, EA,.....well maybe not EA...I'm not feeling that whole exclusive liscensing thing and putting out a flat product, but you catch my drift....... If you can't afford both systems right now buy one this year then next year buy the other at a reduced cost....play the game man......There's this little thing called saving my $$$/ and having patience my grandpop taught me and it's serving me well. I feel more people should practice this lost art.

gskehans97
gskehans97

Too late for me, I'd buy it again at the price that it's at tho cuz it's GREAT!

CDWJUSTIN
CDWJUSTIN

price drop i buy one...forsure the day it drops

CDWJUSTIN
CDWJUSTIN

price drop is what im waiting for...but id go for a bundle to...i cant see them not dropping the price...even if they said they didnt have anything planed they said that in Jan. which was long ago...there not going to tell people now that the price is gonna drop or well then people would just wait for it too drop...but i see it doing sumthing in the next few months ahead...

Agriath
Agriath

If the xbox 360 dropped 100$ then id RUN over to best buy or future shop and buy one

facey_1991
facey_1991

If the price drops i will get a 360 at christmas and like happytimebob99 said get the PS3 when its a reasonable price i've lately got into to buying consoles at launch so PS3 will change that also people would probably say im a sony fanboy with the PS2 and the PSP and i've never owned a Xbox or Xbox 360 and my last nintendo console was GBA!!! (if sony takes the time to read sites like gamespot which they should do if they care about their target customers they will drop the price).

happytimebob99
happytimebob99

[This message was deleted at the request of the original poster]

happytimebob99
happytimebob99

Even though I already own a 360, a price drop will make its userbase grow even more. I really hope there will be a price drop so people will actually realise the PS3 is a major ripoff AT $599. I'll be getting my Wii soon and PS3 too (once Sony realises that no one can afford a PS3 and drops the price to something reasonable. I already have enough money for a Wii and with a summer job I will be able to get a PS3, but I most likely won't get it at launch.

iebubu
iebubu

One more point I would like to make. Just because you have a huge lead in the current generation of consoles, does not in any way guarantee success in the next generation. Sony of all people should know this. I

iebubu
iebubu

I truly believe that the ONLY difference b/t the x360 & PS3 is the blue ray player. I mean the graphics in the PS3 might be a LITTLE better (and that's a big if), but I don

thepeter
thepeter

HORSE ARMOR ALL THE WAY BABY! ...suckers.

king_kong27
king_kong27

who wants a xbox 360? i dooooooooooooooooooo!!!!!!!!!!!!!!!!!!!!!!!!!

Rec-neps
Rec-neps

I would say the Bundle would be more likely then the 100 price drop. And I believe it would make an effect on people's decision on choosing for the PS3 and Xbox 360

Digital-Devil
Digital-Devil

Well see i had planned on getting the Wii SECOND because it DOES look fun and the super cheap price The new control just makes it worth testing out any game the Wii has to offer And honestly now im thinking of getting the Wii AND a 360 insted of a PS3 because the PS3 isn't impressing me sadly...it makes me sad

JinxBoy
JinxBoy

I agree, Digital. I know A LOT of people planning to pick up the Wii, but they're not getting it because the 360 and PS3 are too expensive. They're getting it 'cuz it looks really fun PLUS it's cheap. Seems like most people I know are planning on picking up a Wii in addition to a 360 or PS3, just 'cuz the Wii combination of fun/innovative and cheap is too much to pass up.

Digital-Devil
Digital-Devil

Wrong Shtinky You seem to forget Nintendo DOES have a good number of fans They are the oldest company in games and are doing everything right with the Wii They did alot of wrong with the GC but seem to be fixing those problems

TSOJaybird
TSOJaybird

It is not a question of whether Sony will sel out of PS3 or not. There are a lot of us more casual gamers out here that will own one or the other. If I can't get a PS3 how good does a $299 360 look? Once I have committed I would not buy a PS3 as well. So I am using will power to see this through right now and see where both are heading. I do not consider Nintendo an option for me at this time. Most of the exclusive games are too cutesy for me but I own a GC for my son to play.

barrett_rob
barrett_rob

I will still wait as the price will drop a few more times before fable 2 comes out, if the previous one is any kind of example.

mrzero1982pt2
mrzero1982pt2

i can tell you now, its true, and three words......GEARS OF WAR since halo3 isnt gonna come out till next year, msft wants gamers to show respect for both nintendo (and give them competition with a system only 50 bucks more) by giving them a reasonable choice with systems and keep sony in the dark for the holidays

Mini_Bob968
Mini_Bob968

quote: LordBraz "PS3 is not going to sell out like 360 did. Not everyone's willing to eat ramen for a year to play Warhawk and watch UltraViolet on Blu-Ray. " PS3 is going to sell out Lord Braz. LOTS of people have the money to pay for this and even those who don't will still empty their pockets for one. PS3 is going to sell out regardless of anything MS does and a $100 price drop isn't enough to change this.

dcbronco
dcbronco

Sony will sell every PS3 before Christmas that they ship. But they will also be looking to sell Blu-Ray players, they will start shipping their player around October/November. If MS really wants to hurt Sony, they could bundle the HD-DVD drive with the Premium 360 and give a instant discount for anyone buying the core package and the HD-Dvd drive. If the add-on is $100-130(which is possible because most all the expensive processing parts that make the $500 player cost what it does can already be done by the 360), they could basically have a $325 HD-DVD player on the market. So far HD-DVD has out-performed Blu-ray, people would jump at the chance for a Hi-Def player that cheap. Toshiba gets paid for every DVD sold, Sony wants to be the one to get paid for every Hi-Def DVD sold, MS could hurt Sony and help them selves by bundling the add-on with both systems. Btw, VC 1,the codec used in most HD-DVDs and eventually most Blu-ray DVDs, is made by MS, so MS will get paid for every HD-DVD Toshiba sells.

Ontario21
Ontario21

At what point does selling consoles for a loss become a Price Dumping Issue???

Riverwolf007
Riverwolf007

anyone waiting for a price drop will be waiting for a long time 360s are going to be sold out this xmas no matter what the price point is or whats packed in with it.

Mr_Bodywave
Mr_Bodywave

Mit-Man is right. PS3 will sell out no matter what price the xbox360 is. And MS has said as much. In fact, MS is hoping to get a boost from it. THey expect to sell their xbox360s--and then sell some to people who couldn't lay their hands on a PS3--basically thinking they will "settle" for a 360. Plus--didn't anyone look at MS's quarterly report? They lost a lot of money in the H&E division. To the tune of $230 per xbox360 sold. They are starting to come under pressure about the losses (Especially since they said they would be breaking even on hardware by this point). Plus--they are expecting 2 huge releases next year--Halo3 and GTA4. Both of those will move systems. Might as well move them at the higher price point. Heck--by that time they will likely be making a profit on the hardware! ALSO, until their sales slow down, there is no real reason to lower price. If they are selling all they are making, then keep the price the same. Now next year once PS3 gets up and running, then yeah, lower price. If anything, lower the price of the core system to match teh Wii--take some wind from its sails (sales, sorry). The other option is to watch Sony carefully and lower the price of the xbox360 either when they lower hte price of the PS3 or when they are getting close to breaking even on the hardware. Keep them with heavy losses on the hardware and Sony could end the PS3 at net loss which would hurt Sony. Sony has already said they are expecting to lose nearly $1B this fiscal year (which end in Mar. 07) with only about 5 monhts of PS3. The fiscal year after that they will likely lose that much again (whole year of PS3 losses, but offset some by lower costs to build).

lilweightlifter
lilweightlifter

I really hope that this is not bogus. An HD-DVD drive! Awesome!

Gigastormz
Gigastormz

The second the price drops I'm buying a 360. Or if that rumored bundle pack with the PGR3, extra controller and Live Gold subsription comes out for $399 I'd buy that.

jedimaster1971
jedimaster1971

smart move put the nail in the coffin MS. with sony saying your getting a deal at $600 bucks MS will say, we'll pass our savings on to you, instead of reaping profits. the mpre consoles they sell at a lower price the more ms points and xbox live accounts they sell, the more controllers and games they sell. the console sale is not the place they make money its the years of buy games and accessories that make the cash. hey PS3 YOUR NUMBER 3!

soulknight63133
soulknight63133

I don't think there will be a price drop anyway..when PS3 sells out alot of people are going to buy the X360 instead anyway..During holiday seasons people WANT something NOW and will get whatever is available.

ftjx
ftjx

a price drop this size seems illogical theyre allready a lot ccheaper

jere28
jere28

of course this will affect ps3 sales if they cut the price, maybe not with hardcore gamers but guess what hardcore gamers aren't the main market. The main demographic that would be most affected imo would be the parents who buy there kids a console basically every christmas, if they see 3 systems i'm willing to bet they will not pick the highest priced one no matter what the kid asks for. I would say most parents would buy the moderate priced console more than premium. Not cheap enough to buy a nintendo mii but hey that xbox360 is just right at 300 i don't like MS but there business plan will make any company quiver in there sandals (sony).

rynmls
rynmls

299 dollars for 360? not bad, this console will be a big hit in third world countries but of course the games still cause that much...

HyperMetaDragon
HyperMetaDragon

I doubt it. Plus, Microsoft already said that they wouldn't drop the Xbox 360's price this fall.

exedeath
exedeath

Still doesn't make me want one yet. NOt until a great game like Culdcept Sagas comes out, and.......well thats the only game I can find on it for now that I want. Now if they could just make the online free it would be perfect. They just need a package for the online that deos not contain voice chat, or buddy system, infact just let me play games online for free, and I am happy. All that extra crap is usless to me. Thats why the PS2 has a better online service. Heck even the gamecube does. Keyboard is all I need so I can type in username, and password.

chickenoverlord
chickenoverlord

well its not like they'll announce a price drop this far ahead... could be quite a blow to sony though... cheaper 360 plus gears of war... I'd like a quieter, more stable 360 that runs cooler myself... wonder when thats coming out

Digital-Devil
Digital-Devil

I rather see it like that to But either way it would be a good deal

superbrett2000
superbrett2000

I'd rather have a cheaper Premium system than have it bundled with a useless HD DVD drive and keep it the same price.

PMB960
PMB960

I don't know why people say it won't happend because MS says it won't . If they announce a price drop then people will wait to by their 360 meaning MS could take a bigger loss. If manufacturing a 360 goes down to around $400 a piece then there will be a price drop since that is less than what they are losing now. They don't care about making money short term they just want more people to buy it to make money through games long term. I basically it dependent on how much it costs to manufacture and how much they think the PS3 will sell. At the very least they can bundle a game with it. The HD-DVD drive and a 360 will not cost $399 since an HD-DVD player costs $399 alone. And yes I realize it would be a stripped down version that makes the 360 do the work but even then they would probably lose lots of money since I assume the drive itself costs atleast close to $100 to manufacture.

den4sir
den4sir

If a price cut comes along, I'm buying a second 360.

Digital-Devil
Digital-Devil

I dont see how this would hurt the Wii The Wii is doing alot of things that neither sony or microsoft is doing That is like saying i bet what football is doing will hurt NASCAR Too differant

Igwababa
Igwababa

Wow if this happend then they would really be turning up the heat on both Nintendo and Sony, I mean a big selling point for the wii is a low price point. So say the wii is $250 and a 360 premium is $299 lots of people will say hey its only $50 might aswell get the 360 instead. This will defniantly hurt sony. I mean two 360s for the price of one PS3 I dont know if the PS3 is worth it in that perspective. Though teh $399 with external HD-DVD is brilliant, just another example of choice not force, the only reason the PS3 is so expensive is becuase sony is pushing the Blu-ray down your neck where MS is saying hey if you want it sure but if you dont then fine buy the cheaper model.

mark_unix
mark_unix

want to get European sales up? since they haven't been high enough as Microsoft wished.

CyphenX
CyphenX

Yeah, it would be hilarious if Microsoft announced that there would be a one-day price drop of $100 on the day of the PS3 launch.