Microsoft’s cashback program may have been a bust on Black Friday, but its Xbox 360 sales broke records — and outsold Sony’s PlayStation 3 video-game console by a margin of three to one.
Indeed, the Xbox 360 kicked off the holiday shopping season with sales on pace to beat previous years. Microsoft estimates a 25 percent increase from Xbox 360 Black Friday sales in 2007.
“We entered into the Black Friday sales period with cautious optimism, knowing that dollar for dollar, Xbox 360 offers more social entertainment value than any other console on the market,” said Don Mattrick, senior vice president of the interactive entertainment business at Microsoft.
The $200 Sweet Spot
Xbox 360 sales have surged worldwide since the September price drop, outselling the PlayStation 3 week over week across Europe. Console sales in Europe are up as much as 400 percent, with sales nearly double year over year and reaching seven million consoles sold this generation.
“Microsoft has a $199 Xbox 360 Arcade console, which is the cheapest of all three consoles. The entry-level Xbox is $50 cheaper than the [Nintendo] Wii and $200 cheaper than the [Sony] PS3,” said Michael Cai, a video-game analyst at Parks Associates. “So if the majority of the units Microsoft sold were from that price point, then obviously it’s not surprising. In this economy people want in-home entertainment — but they also want cheaper entertainment.””
Traditionally, Cai said, video-game consoles reach mass adoption when the price drops below $200. Microsoft is the first to achieve that goal, in part, because the Xbox 360 was the first console released in the current generation.
“In this economy you do have a lot more bargain hunters and the price tag for the PS3 is likely to scare away some of the potential buyers in this environment than in a normal economic…