Microsoft to lower Xbox price
Firm reacts to success of less costly Nintendo Wii video-game console
Jul 12, 2007 04:30 AM
Los Angeles–Microsoft Corp., the world's largest software maker, plans to cut the price of its Xbox 360 game console to compete with Nintendo Co.'s top-selling Wii.
Microsoft needs to lower Xbox's prices, ranging from $299 (U.S.) to $479, to increase sales and lure customers who aren't interested in traditional combat and racing video games, Shane Kim, vice-president of Microsoft Game Studios, said in an interview. He wouldn't say when a price cut may be announced. It won't happen at this week's Electronic Entertainment Expo, or E3, in Santa Monica, Calif., he said.
"We need to compete effectively for that customer and part of that is getting to the mass market price point for the console," said Kim.
The Xbox 360 has trailed the $249 Wii in sales since Kyoto-based Nintendo introduced the player in November. This week, Sony Corp. lowered the price of its PlayStation 3 console, which has lagged behind both Xbox and Wii, by 17 per cent to $499 from $599 in the U.S. Microsoft, based in Redmond, Wash., has vowed to make its video-game business profitable by next year.
"A price cut would give the Xbox 360 an advantage over its rivals, particularly in North America where you have a choice of consoles to play the same game," said Etsuko Tamura, an analyst at Mizuho Investors Securities Co. in Tokyo. "There's a lack of Xbox titles in Japan, so a price cut here would have no effect."
In a briefing late Tuesday, the company also said Walt Disney Co. will offer films for rent through Microsoft's Xbox Live online service. Time Warner Inc.'s Warner Bros. and Viacom Inc.'s Paramount studio already sell and rent movies on Xbox Live.
Xbox Live has more than seven million members, surpassing the company's goal of six million members by the start of this year's E3 gathering, Kim said. The company anticipates having 10 million members by this time next year, he said.