Microsoft Says No Xbox Price Cut, Analyst Predicts Otherwise


Despite poor Xbox 360 sales in Japan and Sony’s recent announcement of a price cut for its PlayStation 3 console, Microsoft has said it has no plans to follow with a price cut of its own in that region.

Speaking in an interview with Reuters, Microsoft Japan President Darren Houston said, “Not at this time,” when asked if the company intended to lower the system’s price, but followed up by saying, “We will be watching market conditions. Price cuts are one option.” He also stated that Xbox 360 prices in Japan are “very competitive.”

Wedbush Morgan analyst Michael Pachter, however, has predicted the opposite.

“We expect Microsoft to follow with a price cut of its own,” he said. “Last week, Microsoft announced a slight Xbox 360 shipment shortfall and we do not believe that the company is prepared to allow Sony to erode its pricing advantage.” Pachter said he expects the Xbox 360 Elite to drop from $479 to $399, the Premium edition to go from $399 to $349, and the core model reduced to $249 from $299.

“We think that the console manufacturers will continue to cut price as their production costs come down, and expect sales to ramp significantly this holiday season,” Pachter said. He added that he does not expect Nintendo to reduce the price for either its Wii or DS systems, which have been dominating console sales globally since their release, “as sales for both are still very strong and are anticipated to remain so through the end of the year.”

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