Should MS drop the price of the 360?

Obviously we ALL would LIKE the 360 to inexpensive, but what we want is not necessarily best for the business. So FROM MS's point of view, should they cut price, or leave it as is? If they do cut it, by how much?

Here's how I see it:

AGAINST PRICE CUT - Since the 360 is still new hardware, manufacturing costs couldn't have dopped that much, so a price cut would further hurt profits. If the PS3 were coming out for a cheaper price, a cut might be needed to undercut it, but the PS3 price is so high that it gives the perception that the 360 is less expensive - it's almost a psychological price cut. The Wii is irrelevent, as its going after a different demographic, and technologically inferior (from a traditional point of view).

FOR PRICE CUT - Sony has been fumbling about badly of late. As MS's biggest competitor right now, MS should do all it can to cut down Sony's market share. Anouncing a price cut on the 360 would put a crimp in the PS3's launch - and that's already looking shaky as it is. A $50 price cut to each system would make the 360 nearly half the PS3s price, which could play big into buyer's psychology. It would also make the basic system comparable in price to a Wii (presuming the Wii launches at $200-250.). In fact, it's possible an announced price cut for the 360 PRIOR to Nintendo revealing the Wii's price could force Nintendo to go for the lower price as well ($200), further isolating Sony and exaggerating the PS3s cost. This would hurt the bottom line in console manufacturing, but it could also allow MS to dethrone Sony, resulting in larger long term benefits.

no. not with the lineup MS has coming. no sense in undercutting themselves when the demand is only going to increase.

Too late! Wii Price revealed! ZOMG!

any price cut now would be seen as them panicing due to Nintendo's price, if they were going to do it they should have done it at E3, within hours of Sony's announcement.

I don't think they need to yet. As you said, they got a psychological price cut when Sony announced the PS3 price. I suspect they were probably planning one for the Fall up until Sony's press conference.

But you do make some compelling arguments for dropping it too. It could probably go either way.

what line-up....oh those....looks good but nothing i would buy.

and if they do lower the price, they should wait for the PS3 price, cause $200-250 that the price the Wii is coming out at is way too low even for Bill Gates standard.

What rock have you been under???!!!

$500 for the gimp version, $600 for the real version

Sort of. They revealed the upper price limit. It may - may - end up being lower.

If the Wii is $250, then the need to lower the price of the 360 is lessened, but at $200, knocking even $25 off the price will make it that much more attractive.

MS would be foolish NOT to cut the price of the 360 around Thanksgiving, just to kick Sony in the teeth.

However, there's no reason to do so BEFORE then.

-XCN-

I disagree. Is it really that unusual for a console to lower its price after being on the market for a year? And why would they announce a price cut for this fall at E3, knowing it would cause buyers to postpone their purchase?

As for the Wii, MS did practically endorse the Wii at E3 (prompting a similar remark to be made by Sony). I'm not sure anyone who pays attention is thinking that the Wii and 360 are directly competing. The real fight seems to be between the 360 and PS3. Most currently concede that the Wii will be No 2 (I am not sure it won't end up #1), so the fight between Sony and MS is, rightly or wrongly, going to be framed as winner take all - first place, or last. So I think it would be seen as an agressive move to cut off Sony's balls at a point when it is looking vulnerable. It would also make sense to hold off the price change until they got closer to Sony's release, making it harder for them to respond.

I tend to be an agressive guy on this sort of competition, so I think MS should go for the throat now. But then, I'm not responsible for a multi-million dollar enterprise, and I don't know how big a hit they would take for cutting prices by $25-50.