Microsoft Corp. have admitted that its Xbox 360 game console is not selling as good as Nintendo Wii because of the price, however, it said that although the company wants to sell 90 million of its latest game consoles, it has no plans to cut the price of the Xbox 360 shortly.
While both Microsoft Xbox 360 and Sony PlayStation 3 mostly appeal to hardcore gamers, Nintendo Wii are aimed at more casual buyers. As a result, the latest console from Nintendo attracts those, who would never pay attention to PlayStation 3 or Xbox 360, not only because of complicated games, but also because of the price.
“We are well aware that the sweet spot of the market is really $199. Wii costs $250 and makes a strong value proposition. When mom walks into the store and sees she can get a console with a game for $250, she sees it as a $300 value. They’ve done a good job,” said David Hufford, a director of Xbox product management, in an interview with Bloomberg.
Mr. Hufford was rather quick to clarify that his commend did not signal a price drop and said that the Xbox 360 was selling “well” at current price-points, $299, $399 and $479. Nevertheless, Xbox 360 price reduction is inevitable, even though, this should rather be made earlier rather than later, claims Peter Moore, corporate vice president of the interactive entertainment business in the entertainment and devices division of Microsoft Corp.
“If we don’t make that move, make it early and expand our demographic, we will wind up in the same place as with Xbox 1, a solid business with 25 million people. What I need is a solid business with 90 million people,” Mr. Moore said.
Given that the price drop was not directly confirmed, it is impossible to say whether the company actually reduces the price by Christmas. Considering that now Sony’s PlayStation 3 still costs considerably more than Xbox 360, the world’s largest maker of software still has better position than its direct rival. Nevertheless, without an affordable Xbox 360 machine and games that are aimed at children and casual gamers, it is hard to imagine how Microsoft plans to attract 90 million customers to its latest game console.
Microsoft executives said early this year that “due to unsold inventories in stores”, they expect to ship a total of 12 million Xbox 360 gaming machines by the end of the fiscal year in June, down from their previous target of 13 million to 15 million
(price drop)
