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Friday, 22 August 2008 07:29

Console price war to start

Written by David Stellmack

ImageImage

Powering up for holiday season battle

As we have been saying all along, the holiday console price war is coming this season and all three of the major manufacturers are likely to participate in at least some capacity.

The first shot really came a few weeks ago when Microsoft cleared the deck of the last of the inventory of its Xbox 360 20GB Pro systems for $299. While a few phone calls and searches around the Web indicate that the majority of the 20GB Pro systems are gone, but a few remain.

As we told you previously, the real price cutting will start in September when Microsoft will slash prices on all three systems. The Arcade system without the hard drive will be reduced from $279 to $199. The new 60GB Pro system will drop from $349 to $299, which will almost certainly be met with negative comments from those that just purchased a 20GB system for $299. The Elite will also get a price drop from $449 to $399.

At least for the moment, rumors of a larger Elite system with a hard drive bigger than the recently announced PlayStation 3 appears to have been tabled by Microsoft for the moment. It does, however, almost seem certain that Microsoft will announce a 250GB hard drive for the Xbox 360 either as an available add-on or in a special edition system at some point soon. This is perhaps to coincide with the Gears of War 2 launch that is expected later this holiday season.

As for Sony, they announced the new 160GB PlayStation 3 Special Edition that would be sold in the North American market for $499. It is expected that Sony will announce a drop in the 80GB PlayStation 3 to $349, which would be hard for Sony as they would be losing money or barely breaking even on the unit at this price point.

Insiders are telling us that we may see Sony launch a low-cost $299 PlayStation 3 stripped down SKU for a limited time during the holiday season, but nothing we have at the moment seems to confirm anything other than a $50 price drop on the 80GB unit.

As for Nintendo, the challenge will be to be able to continue to produce enough Wii units for the holiday season to keep up with demand. Nintendo still seems to be trickling the hardware out in limited numbers in order to keep excited about the unit.

We don’t think Nintendo will drop the price this holiday season, however, if they get behind at all to Sony or Microsoft. We would not put it past them to do it to move units before the end of the year. The real challenge for Nintendo is to continue to produce compelling titles that excite people about the Wii. The Wii continues to be the second console of choice among gamers.

It is set to really be a rough holiday season with price cuts and a lot of commercials advertising both hardware and software. With Microsoft’s recent success in Japan, as we told you about yesterday, it is important for Microsoft to continue to attract attention and price cuts might just be the best way to win the holiday season console cage match.

Last modified on Friday, 22 August 2008 08:01
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