Report: Microsoft could release $200 Xbox this September
Update (Monday, 2:43 PM): This story has been modified to reflect correspondence from Microsoft this morning.
If you can see past the extremely odd prose style of this Ars Technica piece Friday by Ben Kuchera, there's actually some potentially very interesting news there: Microsoft may be ready to truly reach out to the mass market with its Xbox 360.
According to Kuchera, Microsoft may well be readying a new round of price cuts for the Xbox 360.
(Credit: Microsoft)Remember, just prior to E3, Microsoft lowered the price of the 20GB Xbox 360 from $349 to $299.
Now, writes Kuchera, courtesy of his source, "the mole," Microsoft is planning to roll out new pricing on the entire line of Xboxes. For a console with no hard drive, the price could be $199; for one with a 60GB hard drive, it could be $299; and the high-end model, known as the Elite, with a 160GB hard drive, could go for $399.
Microsoft said it does not comment on rumors.
If the report is true, however, Microsoft could be making an important move. According to many industry observers, the magic price point in video game machines is $200. Go below that, the theory goes, and you potentially open up your machine to the truly mass market.
Right now, the lowest-priced of the next-generation consoles is Nintendo's Wii, which runs $249. Sony's PlayStation 3 can be had for $399 for a model with a 40GB hard drive, and this fall it plans to introduce an 80GB model for that same $399 price.
If the Ars Technica report is true, then, Microsoft could be the first to break the magic $200 barrier and such a move could go a very long way to helping the company reach its declared commitment to winning the console wars.
If I hear from Microsoft with comment about this, dear readers, so will you.
Daniel Terdiman is a staff writer at CNET News covering games, Net culture, and everything in between. E-mail Daniel.
Heck, quit screwing around and drop it to $50. Lose all those millions in one fell swoop to gain that market share MicroSoft.
It amazes me why the shareholders never complain about this. Maybe if they had sold the Zune for $19.99 from the get-go they could have put a dent in iPod sales. Naw.
It amazes me why people keep forgetting this.
The dirty little secret is, the only thing MS makes significant money on is Office and Windows. Without those two product lines, they'd be a tiny little software company.
Uh, wrong. Just go check the latest Q4 08 earnings report before posting this idiocy. Here ya go:
http://www.microsoft-watch.com/content/corporate/microsoft_q4_2008_by_the_numbers.html
I think its a great move. At 300 now, thats a lot of money for a teen. If it were 200, I'd buy it. But I can't fork out 300 for something I'd play 3 times a week, I'd definitley put out the 200 for it.
If it hits 200, I'm buying one. Whether Microsoft makes or loses money over it is their problem, not mine.
Microsoft has been making substantial amounts of money off the 360 for the past year+. As of *last* XMAS, MS was making $80 per console (read their quarterly SEC filings, folks!) and they have since lowered manufacturing costs some more via a die shrink for the GPU so a $100 cut on the low end model is not exactly impossible, albeit it would be a very aggressive move since it would put them at *Half* the PS3 price point. Factor in their remarkable attach rate of 7 games per console and a price cut could conceivably boost the division's profits even more.
As of now, the only division at MS that is *not* minting money by the hundreds of millions is the online search, which is why they were after Yahoo.
1) You claim they are making $80 per console? Wow, better let CFO Chris Liddell in on your insight:
http://www.123jump.com/earnings-calls/Microsoft/28643/21
"On the revenue side, we sold more Xboxes, so we had more COGS. That is good news. We do not make any money from those but overall in terms of long-term health of the business, the more consoles we sell, the better"
Feel free to link me (and other analysts) to the SEC filings that reveal actual BOM/component costs of the Xbox360 vs sales price, to where you got to $80/unit though. I'll send it to Liddell, he'll be happy and surprised to find out he was wrong about that.
1. The cost of the components used to make the 360 have fallen by over 60% since the 360 was launched nearly 3 years ago.
# 2. The new 360?s coming out this month are using the Jasper mother board, which has both a 65nm CPU, and 65nm GPU, which will further cut the cost of production of the 360, and make it run cooler and more efficiently.
# 3. With huge 1st party games like Fable II and Gears of War 2 coming up, Microsoft can afford to cut the price of the 360 now, and still make profits from the expected massive sales of Gears of war 2 alone( I expect that game to sell at least 4 million in America alone).
# 4. Microsoft E& D Division, which includs the XBOX 360, already made a decent profit in the just ended fiscal year.
On topic: Don't know what to say. Microsoft may be heading somewhere positive. Since the contents to make the 360 are cheaper now, I guess lowering price would be a good idea and might become the new cheapest game console on the market (Bad for Nintendo?).
As for the fallacies in your latest post, Microsoft was not "heavily backing" HD-DVD. It did not have "lost soo much research". What research are you talking about? and Microsoft never "integrated that now failed technology into the XBoxes". Everybody knows that the HD-DVD drive was an external USB device manufactured by 3rd party.
But please, do not let facts interfere with your Microsoft hatred.
The HD-DVD was branded and released by Microsoft as a Microsoft product.
http://www.xbox.com/en-US/hardware/x/xbox360hddvdplayer/
"Microsoft has discontinued production of HD DVD players."
If you are going to blast someone about "facts", make sure of your own first :p
Also, its incorrect that the device was a third-party unit, as it was manufactured and marketed by Microsoft themselves. Microsoft was also clearly vocal in the superiority of the format, which for all intents and purposes was a blanket to help draw potential users away from Sony and their Blu-ray. There has even been some speculation that Microsoft didn't really care for either format becoming dominance, as their master plan was to push downloadable content.
But anyway, its not nice to snipe others when - to prove your point - you fill up your post with assumptions and incorrect information. But alas, that's what fanboys do...*sigh*
As for the external drive, I never said it wasn't marketed by Microsoft. I said it was "an external USB device manufactured by 3rd party", which is correct. I was merely pointing to the very fact that it wasn't an internal drive, because Microsoft never believed that a new disc format was the way to go. Hence the Netflix announcement... I think they are right.
So you are basically repeating what I have said, just from a different point of view, yet you claim you know better.
As for being a fanboy, believe me, you could not be more wrong...
...but so does BD...
(Both formats use the exact same set of codecs; Mpeg 1 and 2, VC1, and H.264.)
As of now the majority of BD movies are encoded with VC1 simply because the mastering software is more mature than h.264.
MS started out neutral in the blue laser format wars, just like Intel; they only turned to HD-DVD when Fox, Sony, and Disney mandated a second layer of consumer-hostile DRM (BD+).
Their investment was minimal; the codec was pre-existent, the player firmware was Windows CE, and the HD-I interactivity App is slated for use in their XBOX Live movie rentals and available for other movie download sites.
And all this has absolutely nothing to do with 360 manufacturing costs, which are primarily tied to the 3 custom chips that make the box work.
Want to try again?
I mean how many people have had to send there console in 1 2 3 times to be repaired, i have. I received it back from microsoft after a repair and it had a different error on it.
So 200 is about right for any model of it because you probably wont get to play it much. I dont understand how they can claim to be winning when THERE PRODUCT IS BUILT SO TERRIBLE! BE SMART, DONT WASTE MONEY, GET A PS3 OR WII. I was a xbox die hard fan...........No More!!!!!!!!!!
# 1. The rrod problem was fixed last year wwhen the falcon XBOX 360's started coming out. Falcon 360's ae every bit as reliuable, if not more relaible than the Wii's and PS3's.
# 2. Even if you bought an older XBOX 360 which and had an rrod problem, Microsoft has given an unprecedented 3 year warranty for all rrod problems. That is more than Nintendo or Sony has ever given in their entire lives.
# 3. The Wii is a low powered, 2001 technology piece of crap, with a proponbderence of shovelwaregames, kiddie games, crap graphics, and some of teh wors gamnes ever released on any console. Unless you are planning on soending your time playing mindless games, give the Wii a miss.
what puzzles me is, if Microsoft wanted to let people download movies online, why the heck couldn't they simply massively increase the # of movies theyt had on the Live movie download service to say over 10,000? instead of handing out the keys to that business to Netfilx, which is non-exclusive, with Netwflix having just signed a contract with LG to put Netflix on LG's Blue ray drive? Seems to guys running the XBOX business are not thinking striaght here, and they are full of arriogance and hubris.
So that would make them pay Sony and lose money to have a system that is comparable to the PS3. They don't want to do that.
Besides which, BD wouldn't add much in that all of the games still have to be in DVD. It would just let you watch movies, which it already does via downloads.
All of the game companies are like that. They are all proud and refuse to yield from that. Everyone knows Sony is, you just showed MS is, and if you think Nintendo isn't, take a look at e3.
Discs don't matter anymore, or won't very soon. Besides, most people that buy a game console aren't buying it to watch movies. I think you will see in the very near future that Blu-ray will be replaced by IP movie distribution over the cloud. Microsoft is already experimenting with that with ATT with Uverse and Netflix in a very limited way. And even without IPTV you can probably count on other media technologies to compete with what is out there. Blu-ray adoption is dismal right now.
But I digress, I am glad the pricepoint may be coming down again. I just hope that Microsoft keeps up with Xbox Live expansion to make sure it remains as good as it is now.
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by Zanny_Blowzsteve
August 2, 2008 10:29 PM PDT
- JC Payne needs to get a clue, The HD-TV player was an add-on.
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Showing 1 of 2 pages (49 Comments)MSFT merely provided a player and made money on the sale of each one.