Xbox 360 price drops by $50

[Carl B]

Or a mistake in case design that they spent too much money on not to release. Their only hope being attaching it to some brand or IP that would give the abomination a chance in hell at selling. Looking over their release schedule the execs saw only one logical choice. Hence, the "Halo 3" edition 360, which stands completely Halo3less, was born from a project gone horribly awry.

Ok, now I wasn't talking about the paint-scheme, and I think that was clear.

I'm talking about the chips. Both the current Elite revision and the upcoming Falcon revision would support the Halo edition as a foundation; I'm curious as to which it might be.

 

[22psi]

TOO many damn skus! Two was pushing it now 4?? And yes the Halo 3 sku is a limited run but still.

I hope they clean this up when the 65nm ships, otherwise this time next year, we'll have 6 skus

 

[Gradthrawn]

Ok, now I wasn't talking about the paint-scheme, and I think that was clear.

I'm talking about the chips. Both the current Elite revision and the upcoming Falcon revision would support the Halo edition as a foundation; I'm curious as to which it might be.

Yes, it was clear, and I knew you were referring to the chips. I just couldn't resist.

The case design is mostly the same, its is the paint scheme that is the issue for most, the etchings look quite nice. My request would have been to match the HALO Zune whose design I really like.

My request would have been to include Halo 3! I just checked out the Halo Zune since you mentioned it. Now that package actually makes sense. I don't necessarily like the design (it would probably grow on me), but I think the direction they went in is quite interesting and far more appealing than the Abomination®. And they actually have Halo 3 content included with it!

But I digress, since I'm way off topic.

EDIT

After further thought, I can see why they might not have included the game. Since someone who would buy a Halo 3 edition 360 might also wanted one of the limited edition versions. Which would make the game that comes with it a waste for such a customer.

 

[RancidLunchmeat]

Bah.

They should have included the game anyway. Anybody who was willing to buy that fugly Halo 3 console would have been willing to pay extra to get an additional copy limited addition copy of the game.

Az: I don't understand your repeated insistence that MS needs to adjust its peripheral pricing because they had a price drop on the consoles themselves.

A peripheral price adjustment would be nice for the consumer, but I'm confused as to your declaration that they have to or the pricing doesn't make sense. What doesn't make sense with the current price structure with no adjustment to peripherals?

 

[AzBat]

Bah.

They should have included the game anyway. Anybody who was willing to buy that fugly Halo 3 console would have been willing to pay extra to get an additional copy limited addition copy of the game.

Az: I don't understand your repeated insistence that MS needs to adjust its peripheral pricing because they had a price drop on the consoles themselves.

A peripheral price adjustment would be nice for the consumer, but I'm confused as to your declaration that they have to or the pricing doesn't make sense. What doesn't make sense with the current price structure with no adjustment to peripherals?

Microsoft originally priced the 20gb HDD @ $100 because if you added it to the Core @ $300, it would cost the same as the Premium at $400. The same was done for the 120gb HDD when the Elite shipped. They priced the 120gb HDD at $179 which would make the cost of the Core + 120GB the same as the Elite @ $479.

With the new pricing structure, the pricing of the accessories don't line up like they did earlier. A Core + 20gb HDD now costs $380 and a Core + 120gb HDD now costs $460.

If they're no longer to continue that paradigm, then fine, but why did they do it in the first place?

Tommy McClain


EDIT: Took out the price increase on accessories, since it's just dumb. LOL

 

[TheChefO]

This (small) pricing move (while understandable) is pathetic.

MS will regret this decision as it will have proven to be the last point in time this gen that they had the clear upperhand and momentum.

2007 will be good for xb360, but it could have been great.

Come 2008, ps3 will be $300 with a killer lineup. It's all down hill from here.

 

[scooby_dooby]

Come 2008, ps3 will be $300 with a killer lineup. It's all down hill from here.

MS can still salvage this IF they are very aggressive with pricing in 2008.

But given their current strategy, or complete lack thereof, I wouldn't put my money on it.

Pretty idiotic decisions from MS over the last year, they had everything lined up coming into 2007 to pull ahead and never look back, but instead seem to be squandering it.

I wouldn't be surprised if this had something to do with Moore's decision to leave, surely he must have wanted to do a more aggressive pricing strategy that he knew would ensure success, but the suits above him were all about short-term profits. Just a random theory...

 

[scooby_dooby]

If they're no longer to continue that paradigm, then fine, but why did they do it in the first place?

I wouldn't read too much into it, right now.

They obviously stuffed the channels full of 90nm Premium's, and this drop is a direct effort to sell those.

They've probably stopped shipping 90nm Core's, and as such are driving sales away from that console even moreso than they have in the past.

Once they start shipping the Falcon's, then we'll see what MS's real longterm strategy is with regards to peripherals etc.

 

[Fu3lFr3nzy]

If they made the Halo X360 transparent green like the old Halo Edition Xbox, that would've been a done deal for me despite the price.

Alas, the ridiculous color(s) and lack of visual design of this one opts me to just buy one of the regular ones

 

[AzBat]

Repent. The kingdom of heaven IS at hand... Armageddon is almost upon us.

LOL

Tommy McClain

 

[Dave Baumann]

I don't think this is clearing of whats remaining in the channel - whatever is actually in the channel would actually need to be price protected, and they would have to hand $20/30/50 back to the distibruter/retailer for everyunit they had in stock that was purchased stock at the old price and are now being told they have to sell it cheaper.

I think the price drop is only happening now because the channel is depleted.

 

[scooby_dooby]

I don't think this is clearing of whats remaining in the channel - whatever is actually in the channel would actually need to be price protected, and they would have to hand $20/30/50 back to the distibruter/retailer for everyunit they had in stock that was purchased stock at the old price and are now being told they have to sell it cheaper.

I think the price drop is only happening now because the channel is depleted.

If that is the case, then this truly is a bewildering move.

Rather than have a SKU available at $250, with a strong value, to propel christmas sales. They've opted to make the core an even worse value, making the only reasonable entry point $350, a full $100 higher than what it could potentially be.

All I can do is laugh at this point, MS is basically teaching "How to Blow a Golden Opportunity - 101"

 

[Carl B]

I don't think this is clearing of whats remaining in the channel - whatever is actually in the channel would actually need to be price protected, and they would have to hand $20/30/50 back to the distibruter/retailer for everyunit they had in stock that was purchased stock at the old price and are now being told they have to sell it cheaper.

I think the price drop is only happening now because the channel is depleted.

Well, Sony did it for the 60GB, and that would have cost Sony a lot more than this would have cost MS (no doubt to be reflected in the Q2 numbers). Either way though, rather than channel clearing specifically, really I just meant stock clearing in general; the main point being that the Falcon revision will not be a 'transparent' SKU to the existing model, so they will need to manage that shift at retail, rather than just being able to introduce them stealthily. It behooves them to have as few of the legacy models on hand as possible when that changeover occurs.

 

[scooby_dooby]

This part of the PR is especially funny:

The fact that we have been able to keep our launch price longer than any other console while retaining our leadership position demonstrates that consumers believe in the value of Xbox 360

They forget to mention they had to lower their shipping targets for 07, and then missed even those lowered targets. And that the Wii is outselling the 3:1 right now.

So ya, they kept the pricepoint, but sales are 3-4million less than they were supposed to be at this point. And they are about 4 weeks away from losing that leadership position.

Not exactly something to be patting yourself on the back for

 

[scooby_dooby]

Pricedrop in Canada - $100 for all 3 SKU's.
http://www.xbox.com/en-ca/community/news/2007/0806-consoleprice.htm

The Canadian pricepoints needed a $50 correction anyways, they were very overpriced with today's exchange rate.

 

[RancidLunchmeat]

If they're no longer to continue that paradigm, then fine, but why did they do it in the first place?

Coincidence? You're placing the entire difference in value from the Core to the Premium solely on the HDD.

As far as I'm aware, the HDD is just one of the differences between the two sku's. So your basis for analysis (and future price adjustments) seems to be off.

 

[Dave Baumann]

If that is the case, then this truly is a bewildering move.

I think its in interim price move, one that they can afford to make possibly because they are starting to get 65nm parts on stream, or are soon to be and are pricing ahead of that.

Well, Sony did it for the 60GB, and that would have cost Sony a lot more than this would have cost MS (no doubt to be reflected in the Q2 numbers).

They would have had to satisfy the losses in some manner for those that were had already been pruchased, but I don't know the number of those as opposed to the numbers that were in Sony's stock. However, it could be the case that they are offering breaks on the ordering of the 80GB models to make up for the loss on the 60GB.

Either way though, rather than channel clearing specifically, really I just meant stock clearing in general; the main point being that the Falcon revision will not be a 'transparent' SKU to the existing model, so they will need to manage that shift at retail, rather than just being able to introduce them stealthily. It behooves them to have as few of the legacy models on hand as possible when that changeover occurs.

If the so called "Falcon" unit is a physically different model, then yes, but that doesn't preculde reducing the costs by shipping 65nm in the current units. As I said, I think this is what we are seeing here - interim pricing due to shifting costs.

 

[RancidLunchmeat]

Can we collect all the assumptions being made in this thread and keep a running list of them, just to keep track?

For example, for this move to be 'horrible' and for MS to be 'offering a clinic on how to blow a golden opportunity', the following assumptions are being made:

1) MS isn't offering another price cut before the Holiday
2) The $50 price drop is ineffective and doesn't spur sales equal/greater than the Wii
3) The 2007 lineup (including Halo launch) is ineffective and doesn't spur sales equal/greater than the Wii
4) All future revisions of the 360 will include HDMI (meaning the current stock lacks value)

I'm sure I'm missing some. But just by looking at the assumptions being made, you can reverse engineer MS's strategy and see that it is logical. Who is to say if it's MS who is putting too big of a value on Halo 3 launch & $50 price cut, or if the forum fanboys are putting too little? The declaration of 'fact' here is interesting.

 

[Cheezdoodles]

2) The $50 price drop is ineffective and doesn't spur sales equal/greater than the Wii

Does MS have to beat the Wii in order for the price cut to be effective???

 

[Carl B]

4) All future revisions of the 360 will include HDMI (meaning the current stock lacks value)

I think you're confused as to the nature of this side conversation; the future availability of HDMI has nothing to do with "value" in the console - the conversation rather centers on what Microsoft's position is in relation to the retail channel moving forward... if this is indeed the case in terms of feature-shift across all present pricepoints. Dave's saying that there may be 65nm chips shipped in the present 360 configs that would allow for a cost buffer moving towards fuller revisions, and I'm just defaulting to a line of thinking that says 65nm chips will come with the new motherboards and not before.