In a not-so-surprising move, Microsoft has announced
the price drop of the Xbox from $299 to $199. The price drop
had been rumored for at least a week now as Microsoft apparently
was working with retailers to unveil the price drop. Also
announced were price drops in Canada (to $299.99 CAN) and
Japan (24,800 yen). This move is of no surprise as Sony made
a surprise move the day before with it's own price
slash of the PS2.
John O'Rourke, director of Xbox marketing, stated the following:
"As part of our long-term strategy to broaden the reach
of Xbox and make it accessible to more consumers, we've been
working for several weeks with our key partners to make this
announcement as seamless and high impact as possible."
O'Rourke also confirmed that the price cut had been planned
for E3. "The traditional forum for making an announcement
of this magnitude is the Electronic Entertainment Expo (E3)
next week, but we've been ready to go for some time and can
easily put this in place at retail now. We see no reason why
eager gamers should have to wait a week to benefit from this
tremendous value opportunity."
David Hufford, Xbox product manager, had this to say:
"We want to make the Xbox more accessible to more people.
That's why we're dropping the price. $199 is the sweet spot
for a lot of gamers. It's about making it more accessible
to more people. We're all at a 199 bucks, so now it comes
down to value. You've got a lightweight, a middleweight, and
a heavyweight in the ring right now--with the little guy being
Nintendo. Their online announcement could not have been more
feeble. It's a cop-out to just announce a component and a
game. If you're taking online seriously, you need to enter
with a little more force than that. Approaching online from
a service standpoint--that's the way gamers want online delivered
to them. Microsoft understands that. I think Sony is obviously
the middleweight. They've got more power than the little guy.
They've announced some games but don't seem to have a clear
direction yet. I'd certainly put us in a strong position going
forward. We'll be packing some serious heat moving forward,
with some great games you'll hear about at E3."
Since Sony had already dropped the price of peripherals and
first-party games, one wonders if Microsoft will follow suit.
Also, this leaves Nintendo as the only one of the three console
developers to have not brought out a price cut, leaving all
three consoles at $199.99 each.