Microsoft Turns Up the Heat on Sony, Nintendo: Xbox Prices Cut Internationally

Since inching into the black, Microsoft’s (MSFT) Entertainment and Devices division has continued a steady roll of progress on the strength of the Xbox 360 gaming platform. Since its 2005 launch more than 19 million consoles have sold, helping to make the entertainment and devices division the company’s fastest growing business unit. To further drive growth and to spur wider international adoption, the company is cutting prices in select international markets.

20GB Xbox 360 packages will see a 5.1% price cut in South Korea; Hong Kong will get a 10.7% adjustment. Taiwan is on track for a 17% discount and Singapore is slated for 10.5%.

Depending on currency, the dollar equivalent price ranges across the region will range from about $320 to $370 (the current US price is $349.99).

With global gaming demand continuing to surge, the move can be viewed as an effort by Microsoft to increase the competition against Sony (SNE) and Nintendo’s (NTDOY.PK) rival consoles.

"This price drop is part of Microsoft’s ongoing strategy to bring Xbox’s high-definition gaming and entertainment experience to an even wider user base," Microsoft said in a statement.

Last month Microsoft cut the prices in some European markets.

Comments

[David Lentz]

I certainly don't see how this "turns up the heat" on Sony or Nntendo.

The prices on all of these units are close enough that price is rarely a consideration in making a purchase. Most often it is a particular bit of software or simple availability on the store shelves that makes the purchase selection.

All that is happening here is that Microsoft is taking the same old product and obliterating their own profit margin in a gamble to gain market share.

Without giving the customers a good reason to choose them, their market share will remain the same, and their gamble (along with their tiny profit) will have been lost.

[Seth]

David - price may be a factor for some buyers choosing between a Wii and a bundled PS3 kit, maybe, but between the Xbox 360 and the PS3, I would agree. There the differences there are negligible.

Re your other comment: that goes to editors choices in choosing the title. I do agree with you, however, price cuts don't automatically "turn up the heat." They are an effort to increase competition (at the expense of margin) but there's no guarantee they will succeed.

[seeksome]

I agree a price cut will not be a big factor on what gaming system you choose you purchase the one you want you do not change your mind because one came down in price.