A number of sources, including famous Wedbush analyst Michael Pachter, are suggesting that Microsoft will move to slash the price of the Xbox 360 by $50. While our sources claim that Microsoft is perhaps studying the move, they don’t expect it to happen till at least June, which is what Pachter is also claiming.
If Microsoft were to slash the price by $50 in June, it is expected that both Sony and Nintendo would also slash their prices on the PlayStation 3 and Wii. It is believed that the current pricing has been in place long enough and with the recent revisions to the Xbox 360 that Microsoft is again making money on the sales of the console. Of course, with Xbox 360 users spending as much as they do on software, the move would continue to stimulate sales of the platform.
In addition, slashing the price by $50 would give Microsoft additional help in moving more of the Kinect bundle units which are currently at $299. With the excellent start that Kinect has had, Microsoft is keen to keep the traction that it has gained going as long as they can. The Kinect launch was considered a success, as Microsoft beat its own projections at launch for the device.
If the price cut does not come in June, sources we have spoken with at the retail and distribution levels believe that all three consoles will be $50 less this upcoming holiday season. When this happens, it is expected to stimulate additional sales for the Xbox 360 and maybe the PlayStation 3; but it seems that the Wii is losing momentum now and it is unlikely that a $50 price cut is going to increase sales for the Wii console by that much. Microsoft looks to continue to be in the driver’s seat for console sales for 2011, and it is their race to lose.