In the shoot-out between video-game consoles, Microsoft has drawn a new weapon — a major price cut in Europe. Beginning March 14, the 20GB Xbox 360 with one wireless controller will cost 270 euros (US$414), 80 euros cheaper. The Elite, with a 120GB hard drive, will be 370 euros (US$568), down 80 euros. And the Arcade entry-level model, with no hard drive, will drop 80 euros to 200 euros (US$307).
Cheaper Than Wii or PS3
The Arcade is now cheaper than the Nintendo Wii and the Sony PlayStation 3 (PS3) in Europe. Microsoft Vice President Chris Lewis said the “Xbox 360 is now mass market in Europe.”
Van Baker, an analyst with industry research firm Gartner, said the move is clearly an effort by Microsoft to protect its installed base in Europe while enjoying the current advantage of getting paid in euros. In Europe, the Middle East and Asia, the Xbox 360 is in first place among current-generation consoles, with 42 percent of the market in life-to-date revenue.
“That advantage with euros is helping them to be aggressive” on pricing, he added. Baker said he expects Nintendo and Sony to follow suit — in Europe. He predicted that prices in the U.S. will remain relatively stable for the time being.
As the jockeying for position continues, Baker said there will not be a clear winner as in past years. Instead, he said, a three-way split will continue as the installed base for each of the consoles is sufficient to interest game developers.
Shifting Positions
Nevertheless, the shifting positions are being watched by the industry. Last month, market researcher iSuppli reported that, while the Wii’s worldwide installed base will be number one this year, the PS3 is growing rapidly with a 97 percent increase in its installed base. At this rate, iSuppli said the PS3 could have…