In spite of the repeated denials by Microsoft that it will lower the price of its Xbox 360 this year, news has come out that the Big M is indeed, planning a price reduction for its next gen game console, according to a report filed by Digitimes. The Xbox 360 Pro System will reportedly drop from its present price of $399 to $299, for a cost savings of $100 to the consumer.
In order to execute the price drop, Microsoft has made deals with Taiwan manufacturing plants to have production costs reduced for Xbox 360s. Manufacturers say that a total cost savings of 15-20 percent can be achieved due to component cost decreases and solving quality control issues.
The ramifications of the Xbox 360,s new price point can be considered as a warning shot across the bows of Sony and Nintendo, since a $299 price for a fully equipped 360 is a message that Microsoft will not relinquish its head start lead in the next gen console race and is taking aggressive action to maintain its popularity.
Nintendo, which has not yet released a price for the Wii, will certainly take the new 360 price into consideration as it tries to determine a competitive range that will make its game console attractive to the buying public. As for Sony, the lowered price of the 360 will put even more pressure on the game giant to acquiesce in its hard line stance not to lower its prices for its PS3 game consoles, which are $499 and $599 respectively-making the Sony offerings the most expensive next gen consoles on the market.
At the time of this report, Microsoft has denied the story and has indicated that it is nothing more than misinformation. However, Microsoft had also denied any existence or plans of the 360 having HD-DVD capabilities only to announce just weeks later that it was developing an external HD-DVD drive for the machine.
