Get ready for Xbox 360 price cut

pk500 · Post by **pk500** » Mon Nov 27, 2006 4:14 pm

MS Xbox VP Robbie Bach suggests Microsoft will attack Sony on hardware price:

http://www.next-gen.biz/index.php?optio ... 8&Itemid=2

MS now is making $76 on every Xbox 360 sold after streamlining manufacturing in the last year, so that gives MS flexibility for price cuts. Sony is estimated to lose $300 on every PS3 sold.

Sounds like MS is in no hurry to trim prices while Sony suffers supply problems with the PS3, but I bet you'll see a price cut by the spring, when Sony has ramped up production.

What do you cats think the drop will be for a Premium? $399 to $299? Or only 50 clams to $349?

The interesting full-length interview with Bach from which this story was written is here:

http://blogs.mercurynews.com/aei/2006/1 ... _wi_1.html

Take care,
PK

grtwhtsk · Post by **grtwhtsk** » Mon Nov 27, 2006 4:18 pm

They'll probably start with a $50 drop.

Post by **ScoopBrady** » Mon Nov 27, 2006 4:20 pm

If there is a price drop I'd say it would be $50. My guess is there will be a change in core and premium content and they'll stay at the same price. I think the core will have a 20 gig HD and the premium will have a bigger one. This is just a guess but it would make sense with the new video marketplace.

DivotMaker · Post by **DivotMaker** » Mon Nov 27, 2006 4:33 pm

If MS is truly going to do a die shrink in 07, then I think they have several ways to go about this.

1) Get rid of the Core package. Sell the current Premium package at $349 or even $299.

2) Offer a new Premium package at $449 that includes a 100 GB HD (rumored) and the new HD DVD drive in place of the current DVD drive and make WiFi as part of the new machine instead of the adapter. I would pay $499 for such a package and it would be very competitive to Sony, especially the $449.

I don't know how much the die shrink to .65 nm will save MS, but I do believe that the key to competing with Sony will be pricing. MS needs to target loyal Sony customers. If they can manage to sell the fact that there are minimal differences between the two systems as far as HD rendering capabilities, then the next issue will be price. If MS is $100-150 cheaper and there is no perceived advantage to either console, I gotta think that money talks and bullsh1t walks.

This should be an interesting 6 months coming up....

DivotMaker · Post by **DivotMaker** » Mon Nov 27, 2006 4:34 pm

double post, sorry

Spooky · Post by **Spooky** » Mon Nov 27, 2006 4:36 pm

DivotMaker wrote:If MS is truly going to do a die shrink in 07, then I think they have several ways to go about this.

1) Get rid of the Core package. Sell the current Premium package at $349 or even $299.

2) Offer a new Premium package at $449 that includes a 100 GB HD (rumored) and the new HD DVD drive in place of the current DVD drive and make WiFi as part of the new machine instead of the adapter. I would pay $499 for such a package and it would be very competitive to Sony, especially the $449.

I like it!

pk500 · Post by **pk500** » Mon Nov 27, 2006 4:38 pm

ScoopBrady wrote:If there is a price drop I'd say it would be $50. My guess is there will be a change in core and premium content and they'll stay at the same price. I think the core will have a 20 gig HD and the premium will have a bigger one. This is just a guess but it would make sense with the new video marketplace.

Don't you think that risks alienating the 6 million-plus who already have bought a Core without a hard drive and a Premium with a 20 gigger?

I'm just trying to think of a precedent of a significant hardware change in a console in the last decade.

The PSX and PS2 had hardware changes, but they were largely cosmetic, with the dinky white PSX and the PS2 Slim. The Dreamcast never changed; the Xbox never changed.

What am I missing?

Take care,
PK

Boom · Post by **Boom** » Mon Nov 27, 2006 4:39 pm

I'd bet a 50 dollar price cut, but think that if they really wanted to attack Sony they should go with $100.00 cut.

I just do know how many fence-sitters a 50 dollar cut would sway. You can bet that a 100 dollar cut across the board would bring in all kinds of new buyers.

I like having the HD-DVD drive seperate. I know add-ons don't do well in this industry but chew on this. These hd-dvd / blue ray drives work overtime reading movies. I'd much rather have a seperate drive for the games and one for the movies. If you ask me, I think that MS actually has the better design choice in that aspect (even though I don't think for a second that they thought about wear and tear on the laser when going this route).

pk500 · Post by **pk500** » Mon Nov 27, 2006 4:39 pm

DivotMaker wrote:If MS is truly going to do a die shrink in 07, then I think they have several ways to go about this.

1) Get rid of the Core package. Sell the current Premium package at $349 or even $299.

2) Offer a new Premium package at $449 that includes a 100 GB HD (rumored) and the new HD DVD drive in place of the current DVD drive and make WiFi as part of the new machine instead of the adapter. I would pay $499 for such a package and it would be very competitive to Sony, especially the $449.

Send your resume to Robbie Bach -- I like this plan! A Premium at $299 would be very attractive to me.

Take care,
PK

Dave · Post by **Dave** » Mon Nov 27, 2006 4:41 pm

Didn't the slim PS2 add an ethernet port, which was an add-on to the bulky PS2?

MS is in a tricky spot due to the dual offerings, but I think adding at least a 20gb HD across the board would help propel their XBL strategy better than a straight price cut on the existing packages. It wouldn't surprise me to just see them add the 20gb to the Core and the 100gb to the Premium and not change prices, either.

DivotMaker · Post by **DivotMaker** » Mon Nov 27, 2006 4:44 pm

pk500 wrote:
Don't you think that risks alienating the 6 million-plus who already have bought a Core without a hard drive and a Premium with a 20 gigger?

Take care,
PK

How can you alienate a customer when you gave him/her the opportunity to buy the Premium to begin with? I bought the Core because it was all that was left for me to purchase on launch day. I would have bought the HD at the time, but they were out. I found a HD at Circuit City 2-3 days later. Can't say anything in that process that alienated me other than the fact that I was lazy and did not pre-order a Premium and the fact that I was 35th in line at CompUSA on launch day and not 30th (they had 30 Premium and 6 Core systems). I could have waitied to find a Premium, but I chose not to...

DivotMaker · Post by **DivotMaker** » Mon Nov 27, 2006 4:47 pm

pk500 wrote:
DivotMaker wrote:If MS is truly going to do a die shrink in 07, then I think they have several ways to go about this.

1) Get rid of the Core package. Sell the current Premium package at $349 or even $299.

2) Offer a new Premium package at $449 that includes a 100 GB HD (rumored) and the new HD DVD drive in place of the current DVD drive and make WiFi as part of the new machine instead of the adapter. I would pay $499 for such a package and it would be very competitive to Sony, especially the $449.
Send your resume to Robbie Bach -- I like this plan! A Premium at $299 would be very attractive to me.

Take care,
PK

You notice I am pretty good at spending other people's money....

pk500 · Post by **pk500** » Mon Nov 27, 2006 4:47 pm

DivotMaker wrote:
pk500 wrote:
Don't you think that risks alienating the 6 million-plus who already have bought a Core without a hard drive and a Premium with a 20 gigger?

Take care,
PK
How can you alienate a customer when you gave him/her the opportunity to buy the Premium to begin with? I bought the Core because it was all that was left for me to purchase on launch day. I would have bought the HD at the time, but they were out. I found a HD at Circuit City 2-3 days later. Can't say anything in that process that alienated me other than the fact that I was lazy and did not pre-order a Premium and the fact that I was 35th in line at CompUSA on launch day and not 30th (they had 30 Premium and 6 Core systems). I could have waitied to find a Premium, but I chose not to...

My point was that I might be a bit miffed if I bought a 360 in January with a 20 GB hard drive for $399, and a unit with a 100 GB hard drive became available for the same price in March.

But the same thing happens every time there's a price cut, so I guess it's nothing new.

Take care,
PK

Murph · Post by **Murph** » Mon Nov 27, 2006 4:49 pm

I'm in favor of a built-in HD-DVD drive (with HDMI). I know it's not the same as a price cut, but that's what I want.

pk500 · Post by **pk500** » Mon Nov 27, 2006 4:50 pm

Dave wrote:MS is in a tricky spot due to the dual offerings, but I think adding at least a 20gb HD across the board would help propel their XBL strategy better than a straight price cut on the existing packages. It wouldn't surprise me to just see them add the 20gb to the Core and the 100gb to the Premium and not change prices, either.

Nothing is easier to promote and sell than a price cut. You can explain to the gaming community that they're getting better technology for the same price, but that doesn't mean sh*t to the non-gamer.

If MS wants to take a bite into the non-gamer market, then nothing says "Welcome aboard!" like a price cut.

I'm a longtime gamer, but I've been a miserly bastard for even longer, so a $399 Premium with a 100 GB hard drive would be less attractive to me than a $299 Premium with a 20 GB hard drive. Price talks loudest with me.

Take care,
PK

DivotMaker · Post by **DivotMaker** » Mon Nov 27, 2006 4:51 pm

Boom wrote: I like having the HD-DVD drive seperate. I know add-ons don't do well in this industry but chew on this. These hd-dvd / blue ray drives work overtime reading movies. I'd much rather have a seperate drive for the games and one for the movies. If you ask me, I think that MS actually has the better design choice in that aspect (even though I don't think for a second that they thought about wear and tear on the laser when going this route).

I think you could leave it separate for the new "Core" product, especially if it is priced at $299. This way, you leave the choice with the consumer if they wish to upgrade or not.

As far as the new "Premium" with the HD-DVD built in, you would almost have to offer it as part of the machine to be able to save enough on manufacturing costs by not having to build a stand alone unit and package that unit as well. If they do come out with an integrated HD-DVD and a 100 GB HD, I am likely all over that product as it would take care of my immediate, but more importantly my future needs from a hardware perspective.

DivotMaker · Post by **DivotMaker** » Mon Nov 27, 2006 4:56 pm

pk500 wrote:
My point was that I might be a bit miffed if I bought a 360 in January with a 20 GB hard drive for $399, and a unit with a 100 GB hard drive became available for the same price in March.

But the same thing happens every time there's a price cut, so I guess it's nothing new.

Take care,
PK

Good point....

DivotMaker · Post by **DivotMaker** » Mon Nov 27, 2006 4:57 pm

Murph wrote:I'm in favor of a built-in HD-DVD drive (with HDMI). I know it's not the same as a price cut, but that's what I want.

I knew there was something missing in my replies....I could not agree more with the HDMI capability.

Diablo25 · Post by **Diablo25** » Mon Nov 27, 2006 5:08 pm

DivotMaker wrote: 2) Offer a new Premium package at $449 that includes a 100 GB HD (rumored) and the new HD DVD drive in place of the current DVD drive and make WiFi as part of the new machine instead of the adapter. I would pay $499 for such a package and it would be very competitive to Sony, especially the $449.

I like this idea. With the new video marketplace there is a need for a larger HD and the HD-DVD is a no brainer in my book. All this for $449 would be a super package.

Diablo25 · Post by **Diablo25** » Mon Nov 27, 2006 5:10 pm

I'm a longtime gamer, but I've been a miserly bastard for even longer

Kazuya · Post by **Kazuya** » Mon Nov 27, 2006 5:15 pm

Diablo25 wrote:
I'm a longtime gamer, but I've been a miserly bastard for even longer

Yeah, the news does nothing for me as I ALREADY bought one, long ago. So I guess my response is whatever price it takes for PK to impulse buy one, that's what I hope it drops to. Now a drop on the HD-DVD player would definitely interest me.

bdunn13 · Post by **bdunn13** » Mon Nov 27, 2006 5:17 pm

Murph wrote:I'm in favor of a built-in HD-DVD drive (with HDMI). I know it's not the same as a price cut, but that's what I want.

I agree but I doubt they will do this. If they did, then you would be forcing consumers to pay for the drive just for movies(as games will never use this on the 360) OR you could let devs use it for games but then you have what would appear to be multiple consoles.

pk500 · Post by **pk500** » Mon Nov 27, 2006 5:33 pm

Kazuya wrote:Yeah, the news does nothing for me as I ALREADY bought one, long ago. So I guess my response is whatever price it takes for PK to impulse buy one, that's what I hope it drops to. Now a drop on the HD-DVD player would definitely interest me.

What's an impulse buy?

Honestly, I can't remember the last time I've made an impulse buy on anything. OK, to be fair, I walked to the Post Office to mail stuff during lunch today and picked up a prescription at the drug store, and I bought a Tootsie Pop on impulse for a nickel for the walk home up the hill.

That's about the extent of my impulse purchases, to be honest. Everything else is calculated and fit within a budget.

I think I could make $299 for a Premium fit under my expenses cap next spring.

Take care,
PK

Brando70 · Post by **Brando70** » Mon Nov 27, 2006 5:37 pm

For strictly gaming purposes, the current Premium offers more than enough punch. I am guessing that will be the focus of the price cut, with it dropping to $299-349. Honestly, given the breadth of the library right now, the XBL integration, and the way some of the new games are really showing off the potential of the machine, $300 for a premium is a bargain.

If the price does drop to $299, I wouldn't be surprised to see the Core eliminated and a new "Premium" rolled out with 100GB and HD-DVD. However, I'm guessing that would probably be $500 at least.

Brando70 · Post by **Brando70** » Mon Nov 27, 2006 5:39 pm

pk500 wrote:
What's an impulse buy?

Honestly, I can't remember the last time I've made an impulse buy on anything. OK, to be fair, I walked to the Post Office to mail stuff during lunch today and picked up a prescription at the drug store, and I bought a Tootsie Pop on impulse for a nickel for the walk home up the hill.

I hope you cleaned that nickel off after you squeezed it out