Wednesday, Reuters and Bloomberg stories on the same topic, whether Microsoft would cut the price of its Xbox 360 game console, had considerably different takes, though using the same primary source. Head of Microsoft Games Studios, Shane Kim, told Reuters Microsoft has "no desire, no need, to react to anything the competition has done," referring to Sony's recent decision to trim $100 off its PS3 game console price. "We feel really great about the Xbox 360 momentum right now. Customers are voting with their wallets, it's not just about console units. We feel great about how we're doing." Bloomberg, meanwhile, quoted Kim as saying, "We need to compete effectively for that customer and part of that is getting to the mass market price point for the console. We definitely are working on that area." Kim wouldn't say when consumers could expect Xbox price cuts, according to Bloomberg. Microsoft shipped 11.6 million Xbox 360s worldwide in its just-ended fiscal year, short of its 12 billion unit target. In fiscal 2006, Microsoft's games unit lost $1.26 billion on sales of $4.26 billion; the company recently announced it was taking a $1.15 billion charge to repair broken Xbox 360s. Separately, Microsoft announced plans to distribute 35 Disney movies in high definition, including mega hits like "Aladdin" and "Armageddon," through downloads on its Xbox Live service. Disney joins more than two dozen other content providers already available on the download service. The agreement also allows Xbox Live users to rent films on demand as they become available from Walt Disney Pictures, Touchstone Pictures, Miramax Films and Hollywood Pictures.
Sources: Press Release, Reuters, Bloomberg, AP
Commentary: Why Microsoft Must Come Clean About Xbox 360 Flaws • Sony Cuts PS3 Price by $100, Announces 80GB Version • Microsoft to Take $1B Charge for Xbox 360 Repairs
Stocks/ETFs to watch: Microsoft (NASDAQ:MSFT), Disney (NYSE:DIS). Competitors: Sony (NYSE:SNE), Nintendo (OTCPK:NTDOY). ETFs: iShares Goldman Sachs Software Index Fund (NYSEARCA:IGV), Software HOLDRS Trust ETF (NYSE:SWH), PowerShares Dynamic Software (NYSEARCA:PSJ)
Conference call transcripts: Microsoft F3Q07 (Qtr End 3/31/07) Earnings Call TranscriptMicrosoft F3Q07 (Qtr End 3/31/07)
Related: XBox Home • XBox Live/Movies
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