For a while, I've said that Microsoft needs to find a way to attract more customers and bring more people on board. The first step, I said, was to lower the price of the Xbox 360 all over the world to increase its value to consumers and finally make it an ideal solution for customers.
Just one day after writing that here on The Digital Home, Microsoft did just that. And according to its own internal figures, Xbox 360 sales over the weekend subsequent to its announcement of the price cut were six times higher than sales over the previous weekend. Granted, these are internal Microsoft numbers and we'll need to wait another month to see what the impact will be when NPD releases its official numbers, but I don't doubt Microsoft's sales numbers at all.
From the beginning, the Xbox 360 had the kind of potential the other consoles simply didn't. Sure, the Wii is selling well and there's no sign of it slowing down, and finally the Playstation 3 is catching up to the rest of the pack, but Microsoft has an advantage aside from online gameplay now that it has taken the pricing lead from Nintendo.
The biggest barrier to entry for many consumers in the video game space is price. Because of that, millions of consumers needed to decide which console they prefer based on their budget. Since the Wii was released, those choosing with their wallets picked the Wii. But now, they can pick up the more powerful console at even more affordable price.
There are two ways to be successful in business: product differentiation or pricing differentiation. The way I see it, Microsoft has the advantage on both counts.… Read more