Microsoft aware Xbox 360 "sweet spot" is $199, not limited to 20-something demographic
By Conrad Quilty-Harper 
posted June 9th 2007 2:51PM
posted June 9th 2007 2:51PM
Xbox's director of product management, David Hufford, said to Bloomberg yesterday that "We are well aware that the sweet spot of the market is really 199 bucks.'' Peter Moore and Albert Penello, the big guys of Xbox marketing, also stated that the company needs to "expand our demographic" and build content that appeals to people other than the 20-something males (in other words: "hello Moms!"). Why exactly Microsoft has decided to take the metaphorical mouth freshener at this point isn't quite clear, although we're guessing it comes down to an attempt to differentiate the Xbox from the PS3 in the minds of household purchasing decision makers and take a little sheen of the Wii's apparent domination of the lucrative casual gaming market. Hey, if these veiled marketing quotes eventually means cheaper consoles, who can complain? Microsoft, just cut the prices all-freakin'-ready.[Via Joystiq]
Hmm I might actually get one now! Would that make the Premium System $200?
$199? Isn't that the price of a...
*ahem* I think Microsoft is feeling Nintendo's pressure.
Price of a what? The Wii is $250.
Nintendo? Don't be stupid. (Disclaimer: Wii owner here).
If you would look more carefully at market structure, you would notice that every console now competes with PS2.
$199 == new PS2 + 2 games. (And PS2 has library of games to choose from)
I'm sure that as soon as M$' gaming division would reach profitability, they would start playing with price - probably by releasing new cheaper SKU or revising Core version. But not before Xbox would become profitable.
I'd say that Xbox360 price is OK. I do no like classical controller nor actual game library does fit me - PC RPG/FPS fan here - yet there are good games and over all it is very nice offer for all what it has inside. I think both Xbox360 and Wii are priced OK for their respective target audiences.
Though of course to widen the audience, vendors would have to resort to price cuts - both on front of consumers and on front of developers. (*)
I hope that Wii & PS3 would start feeling heat of XBLA soon - because from my POV this is best what happened to game consoles in all years: finally way to deliver really cheap games to masses.
(*) With actual price of Wii, the price cuts might actually get ugly. From my personal experience - as embedded software developer - such hardware becomes cheap as dirt in two/three years. Yet, Wii has little/no potential to boost user experience - what would mean that in two-three ears Wii might cost say $75-100-120 (what PS2 costs now). Nintendo would have to release new console in no more than 3-4 years. But Xbox360 has a capacity to grow, since it does support both SD and HD along with XBLA and game patching. So it would last longer than Wii.
Wait... let me get this straight, so Nintendo isn't allowing people to download and play games on their system either? I think XBox's live arcade thing came after Nintendo unveiled their plan to allow small games to be downloaded and played on the system (remember, Wii's download play claim came at E3, as they unveilied their new system and the widely mocked name). What the Wii is missing, to the dismay of retro gaming fans, is a sizable storage method. Ultimately, the two systems are under two different pricing structures while two very similar concepts.
You can claim up and down that the Wii doesn't add to the user experience of the system. But there's a lot of features in the Wii that MSFT and SNY seem to be mimicking as of late. Nintendo has been pretty effective in putting on the pressure on their competitors for a relatively petite price. As much as it may be hard to admit for MSFT and Sony... Nintendo is the one applying the pressure, they're back and they want their market share back. MSFT and Sony right now are the ones trying to defend a crown from the previous generation and they've become really reactionary. This isn't meant to be a bash on the other two systems, but it ain't Nintendo feeling the heat, it's vice versa.
BTW, Adam, the $249 price tag includes a game... and with games sitting at around $50... if you can find the core system, which, I could have sworn existed, it'd be $199.
what microsoft really needs to do is bring down the cost of 1 year of xbox live and the cost of some the xbox live arcade.
Can't afford the $4 a month for it? LOL
for 199, i would buy it too!!!
does the machine makes a lot of noise as people are complaining???
Only if you get a bad one. My Elite is nice, quiet, and well-behaved.
I'm betting the Core will be dropped to $200. Production costs for Elite is around $323 last I heard from iSupply.
I guess it's noisy, but only if you have your game on mute or something. It seems pretty loud when the game is just starting up, but I don't hear it at all once I'm playing. The sound from the game easily drowns it out.
No, it really is not bad with noise at all.
Maybe I'll re-think about getting one. Or not where there's still the chance of "ring of death".
Oh stop. There's a chance of getting a bad unit no matter what you buy. That chance isn't any higher for the Xbox. Wait for the price drop if you have to, but go ahead and get one, it's a good machine. :)
$199 + $79.99 for a hard drive + $199 for hd-dvd....i guess they are working on getting there...
Getting where? Who says they have to buy the HD-DVD drive? Accessories are accessories so that if you dont want them you dont have to buy them.
Yeah... how the hell is the HD-DVD player necessary? It has absolutely NO use for games, it's only for watching movies. Same as a standalone player. As for the hard drive, you only need to pay extra for that if you bought the Core system, and who would do that anyway?
When they pop that new CPU in there, I'll be all over it with this price point.
Does anyone know where to go to get numbers of sold consoles (as of now) for all the next-gen systems, what they cost to make, what profit (or loss) each manufacturer gets?
I'm curious to see exactly how well Wii is selling compared to the others.
thanks
http://nexgenwars.com/ here you go it shows the the sales numbers.:)
I don't know where to go for that info, but I recall reading recently that Xbox 360 has sold around 10 million units, and Wii is rapidly approaching it with about 7 million. Wii would probably have overtaken the 360 by now if there weren't something of a shortage. Don't really remember the PS3 numbers, but it was significantly less than the other two...
Christopher,
The site nexgenwars.com provides a pretty accurate number of consoles sold to date of each next-gen system. As for cost to make each and their profit, most companies won't reveal that. All you can look for is analyst predictions. Hope this helps.
nexgenwars.com is highly inaccurate. They use estimates of sales growth to determine sales. Take the total number sold, divide it by x time period and that's how they get the growth factor. It doesn't account for purge growth or slumps. Someone actually goes in and edits the sales numbers by hand based on guesses as well. nexgenwars is probably the most bias site as well. When MS announced that 10million xbox360s were "sold" they instantly marked their numbers up, but they won't do the same when Sony announced they hit 1 million in Europe or for that fact whenever Sony announces a number.
When it comes from someone other than Microsoft, I might actually start to get excited...
I'm torn the same way... I'd almost rather get a PS3 because it's from a more trustworthy company.
Although consider this: If you buy a Xbox360 then that reinforces MS to make more games, and if you don't buy Vista or Office that reinforces them to make more games if they see it as profitable.
Of course that assumes MS wants to make better margins instead of be a monopoly... so it's really all just wishful thinking...
I'm going to go buy a PS3 now... and put linux on it...
A trust worthy Company? You mean the one with the RootKits?
they should just make xbox live gold for free considering a bunch of people already have the 360 wut good wud a price cut do?
Maybe because charging for Xbox Live guarantees Microsoft income for the life of the Xbox rather than just the initial sale, which at first they were actually losing money on? I don't condone charging for products after you've bought them (see map packs for Gears of War), but I'll admit its one hell of a way to make money.
will the 65nm cpus and gpus (if its a whole chipset)come at the same time ??? if not which will be the later 1 cos im holding out for a price drop (i cant get it till october anyways)
I have one but $299 sounds more reasonable...
One thing I wish MS would do is to fix the noise It's just too goddamm noisy!
the wii is not next gen. its a cube prettied up.
That may be your opinion, but it doesn't make it true. The Wii is just as much a next generation machine as the other two. Nintendo decided to go in a different direction with this generation of machine than Sony and Microsoft. MS and Sony upped the horsepower; Nintendo added a new dimension with a revolutionary control system. If anything, Nintendo made a larger leap than any of their competitors.
hahaha you poor misinformed fool
Any of you guys reckon Engadget should get an anti-fanboy scanner to keep the likes of Jason away from this otherwise reasonable and enjoyable place?
I absolutely agree with ELmo. The Wii is definitely more nextgen then the other two.
I've been a gamer since about 1985 and for as long as I remember it's always been the same thing with new systems, better graphics and more buttons on the controllers. The Wii goes in a new direction. After 2+ decades it's about time somebody changed things up.
Side note: my three year old son literally just walked up to me with an old N64 game cart he found and asked me to open it. It doesn't open I said, that's the game itself. I forget that's something else that's changed, carts to discs.
Price cut or not, save your money for the PS3 - most of Europe did. It's a better system, with no noise, no overheating - !no Red Ring of Death! - and more games in the future once developers learn to embrace its technology. I'd look for a price cut on that system, too, in the near future.
Its a better system? Crappy interface, no games, lousy online experience, and more expensive. Hmm...
$199 sounds great, but to be honest that almost seems underpriced. The Xbox 360 is a beast of a system compared to the Wii. Really, I dont even know why people compare the two anymore. The Xbox 360 has great games, awesome Media center functionality, great graphics and sound, and an awesome online experience.
Competition is sooo sweet...
yah seriously, if it wasn't for the wii's sales kicking microsoft's ass right now, they would have absolutely no incentive to drop for a loong time. The PS3 would be floundering about at its ridiculous price point, and when they finally started to get production costs down to the point where they could cut costs, microsoft could easily do the same. But now with the wii selling insanely well for $250 microsoft needs to get their price down or risk losing all the gamers/gamer's parents who will buy one console and have trouble ponying up for a often defective $400 console (my brother's just red ringed last week, no mistreatment)
US$199? I consider buying it... But is there any great Rpg game other than Xbox 360?
But I think Wii and Xbox 360 games are different, so the segmentation is different to... Girl Gamer will Buy Wii for Sure (I have saw many wii ads on Girl magazine, but Never seen Xbox 360 ads n girl magazine) .. But the boy must be hard to choose... The Game fun and colorful games like Harvest Moon and Cooking Mama. But Which girl want play Halo or Dead Or ALive?
http://www.cutiegadget.com
At 199.oo I'd buy a second one, if anything for it's streaming purposes. I think it fits right in the catagory of prices there. I have a 360 and enjoy the games it has now, but I still am going to buy the Ps3 because of it's future library which you know is coming. The system that it's hard for me to justify buying is the Wii, it;s not the price, I have friends that have one and it seems to get a little stale after a while. Is it just a fad I guess is the question. With E3 around the corner hopefully everyone brings out the best of show.
"I can has pricecut" = cute
For $200 I might even buy an Xbox 360 before Halo 3 comes out.
Microsoft's gamerscoreblog has a note up from Hufford saying that his remarks were taken out of context somewhat. He says they were made to Bloomberg about two months ago when they were discussing monthly sales figures and talking about console pricing in general.
http://gamerscoreblog.com/team/archive/2007/06/08/551072.aspx#comments
If it hits $199, the next time I go Asia I'm gonna stop by at Japan and get one of these machines.
Woohoo, a price cut means cheaper replacement plans/extended warranties... I love my 360, but I've come to the conclusion that you have to be nuts to own a 360 without a service plan or warranty of some kind. The design of how the gpu and cpu are soldered and mounted to the motherboard and how they handle heat and flexing due to expansion and contraction of the board is completely unacceptable. This is the first console I'v owned that I expect to grudgingly replace at least every 2 years. Still too much money for being the Mazda Rx-7 Twin Turbo of video game consoles... (Fanboy type following, amazing performance, ahead of its time, a great value for the money, with a motor that will pop if you look at it wrong without a number of warranty killing mods that should have come on the car...)
I'm on RoD #3, which took about a month to get back to Microsoft thanks to their wonderful outsourced "support". Maybe #4 will last more than six months...