Aaron Greenberg, group product manager for the Xbox 360, said that the price cut had been planned for a long time and is meant to coincide with the Aug. 14 launch of Electronic Arts Madden NFL 08 football game.
Rumors of the price cut had leaked from a variety of retail sources. But some thought that Microsoft wouldnt cut its price in advance of the late-September release of Halo 3, which is expected to drive demand for new consoles.
The Xbox 360 Elite console, which features a 120-gigabyte hard disk and HDMI connector, will also be cut from $479 to $449, and the Xbox 360 Core, with no hard disk, will be cut from $299 to $279. The Halo 3 special edition Xbox 360, which comes with a 20-gigabyte hard disk and an HDMI connector, will sell for $399, once it debuts in September. The Halo 3 console will also have an authentic Spartan green-and-gold finish, as well as a matching Xbox 360 Wireless Controller, Xbox 360 Headset an Xbox 360 Play and Charge Kit and more.
We have maintained launch price for 21 months, Greenberg said. Thats the longest on record for any new console. Now we are cutting the price as we think about bringing in those who have an Xbox or PS 2.
Greenberg said the price move was not a reaction to the Wii and he said the Xbox 360 has a lot of content that can appeal to broader audiences such as the Scene It? movie trivia game and the new Guitar Hero III game.
Its a little bit of a surprise since the market pressure isnt there for a price cut, said Van Baker, an analyst at Gartner. The PlayStation 3 price cut didnt really turn out to be a price cut since they will discontinue the price of the cheaper unit.
Greenberg noted that the HDMI connector, which goes with the motherboard code-named Zephyr, will be used only on the Halo 3 special edition and Xbox 360 Elite consoles for now. (Presumably, they need to ramp up production of these boxes). He declined to comment on whether the boxes coming this fall have any new electronics on the inside. Microsoft and its suppliers are working on 65-nanometer versions of the main processing chips.
Greenberg said that the delay of Grand Theft Auto IV, announced last Friday, will strengthen the appeal of exclusive Xbox 360 titles such as Halo 3. Now the ball is back in Sonys court. Will it really cut the price of the $600 PS 3? The pressure is