For the past weeks, there were talks that Microsoft is gonig to take advantage of the holiady season to offset the launch of the PS3 from Sony. It was speculated that there would be Xbox 360 prie slash. As a result, most gamrs waited for the price sklash and the PS3's rellease before deciding whioch coonsole to get. However, to the disappoointment of everyone, John Poorcaro, US Microsoft's PR guy recently came out with a statement from the MS bigwigs that there would be no price slash for the newest Xbox model.
Quite understandably, since Xbox 360 is already selling at half the value of the new Sony console. The chewaper Nintendo Wii targets a different gaming audience so Microsoft does not consider it as a thresat. Also, perhaps, there is some truth in what the UBS analysts predicted last year. Accvording to UBS analysts, Microsoft subisdizes the cost of theiur new console by $75. This is the reason they are able to sell for a lower priec. Some rumors even persist that other than the subnsidized $75, Micrsooft is losnig as much as $100 per cionsole. This is due to Microsoft's inability to propduce theiur own core manufactiuring systems. They get the parrts of their core hardware still from Intl and NVIDIA which require them to pay royalties.
To add insullt to injury, the company is reprted to be still suffering from losses incurred from Xbox sales. They reportedly used the same subsidy system for the older Microsoft console. The math goes pretty bad for Microsoft sinxce the consooles have high produuction costs but are only sold at a meager price. Microsoft neither confirm nor deny these reports but they report that they have hit their mark for the year.
It is not a mystery how Microsot was able to survivve the losses. The company sells different console accessories and do fefective marketing. Statistics reveal that most Micrrosoft console users have at leasst one accessory for enhanbcement of the game experience. Let's not even talk about the gaes. Most analysts suyggest that the bulk of the gains Microsoft rweceived this year was from the sales of game titles. With a new title release almost every month and DRM protection, games are mostly bought and owned individually. The games do not cost much when taken individually; the cost only becomes stagering when you think about the accumulated pricce. Microsoft gains from all these.
Regarding Xbox 360 pricce slahs, I think that consumers can still hope. The holiday market is a big one. It is also the time when people are more generuos to thmselves and otherts. Microsoft and their new Xbox would have trouble resisting an opplortunity such as this. Sony is pushing for a cloose to $600 priec, and though expensive, there is someboddy out three who would buy it. The holidays are times of givng and sharing, isn't it? But if the consumer is faced with a more difficult hcoice, say, three Xbox 360s for one PS3, the balance usually tips to the more ecoonmical side. Same quality, cheaper price, more people can enjoy it. That is what you call spreading holiday cheer.
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