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Microsoft: $199 Is Console "Sweet Spot"

| 11 Jun 2007 18:37

Microsoft will make an aggressive push to expand its Xbox 360 user base and appeal with a broader range of games and, quite likely, a price cut to the console, according to a recent Bloomberg report.

Peter Moore, a Microsoft official who oversees the console's progress, told the financial news outlet, "If we don't make that move, make it early and expand our demographic, we will wind up in the same place as with Xbox 1, a solid business with 25 million people. What I need is a solid business with 90 million people."

In a clear attempt to win over existing and potential customers enamored by Nintendo's hot-selling Wii console, Microsoft has started to absorb lessons of its success.

David Hufford, a Microsoft director, said the Wii has struck the right notes with consumers. "We are well aware that the sweet spot of the market is really 199 bucks," he said, adding that the Wii is "a strong value proposition" because, "When mom walks into the store and sees she can get a console with a game for $250, she sees it as a $300 value. They've done a good job."

The basic version of the 360 console retails for $299, with the premium version coming in at $399 and the Elite costing $80 more. Microsoft has not lowered the price of any of the variations since launch, though most analysts are predicting one for this holiday season.

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