Microsoft Officially Slashes Japan Xbox Price

securitas writes "Reuters' Daisuke Wakabayashi reports that Microsoft will 'cut the price of its Xbox game console by a third in Japan, undercutting rival Sony Corp's recently reduced PlayStation 2 price ahead of the holiday shopping season.' The price cut takes effect on Nov. 20 when it will be reduced to 16,800 yen (US$155) from 24,800 yen (US$228). The cut comes a week after Sony's 20 percent cut in its PS2 price to 19,800 yen (US$182), which takes effect Nov. 13. (Gamespot brief) Does this hint at a holiday price cut for North America, too?" We mentioned price cut rumors for Xbox in Japan a couple of weeks back.

Comments

MS is nervous

[scumbucket]

Nintendo is turning up the heat with it's GC price cutting.....

Re:MS is nervous

[metallicagoaltender]

If MS is worried about Nintendo, they have their heads farther up a dark cavity than I thought. Nintendo fills a niche market, and fills it quite well. The only company MS is battling for console supremacy is Sony, and they've been getting their asses handed to them.

The only way they're going to make a real gain (even if it's shortlived) is a decent sized price cut compared to the PS2.

Re:MS is nervous

[Matrix272]

The only company MS is battling for console supremacy is Sony, and they've been getting their asses handed to them.

If you think the point of the Xbox was to become the dominant console on the planet, you're far more naive than I would have guessed. Microsoft isn't stupid, they know that the PS2 outnumbers the XBox by the tens of millions. The point of the XBox was to show that Microsoft COULD make a worth-while console, and to gain momentum. The XBox 2 won't even try to dominate the market... but it'll make more in-roads for Microsoft. I'd guess the XBox 3 MIGHT start really giving Sony a run for their money.

The XBox is already pretty obviously the most powerful console in the world, but it doesn't have the great games... because it doesn't have the great developers yet. The XBox sent a message to the developers that Microsoft was a very real force in the video game industry. The XBox 2 will send an even greater message, being that the public supports it. Around the time the XBox 2 reaches its 2nd or 3rd birthday, you'll see a massive influx of developers making XBox games. When the XBox 3 is released, Microsoft will clearly have enough developers to make Sony nervous.

The XBox was never going to take over the world... not even close. That was never the point anyway... Just watch out for the XBox 2 or 3.

Re:MS is nervous

[Acidic_Diarrhea]

The market strategy you are describing is indeed Microsoft's strategy but it's also important to note that no console manufacturer has ever used this model before. Mainly because no company has been willing to operate at a loss the likes of which Microsoft is currently seeing. When Sony jumped into the market with the PSOne, they didn't have a long term plan to slowly take market share away from Nintendo and Sega - they aimed to corner the market for that generation and move on from there. I think that you're overstating the future for the XBox - it certainly could go down the way you describe but it's not as likely as it seems you believe.

I don't think Microsoft is going to be a company that gets a devoted following (like Nintendo) since they have not really been a great first person game developer (outside of the third party companies that they've bought) so they're not going to have a guaranteed base they can work from.

And my final point is that you didn't hear all this talk of Microsoft planning not to win this generation of hardware with the XBox until after the XBox had lost. There was a program on G4TV regarding the making of the XBox and at the time of the launch, Bill and company seemed quite excited about the prospects. It's easy to say now that MS had planned all along that they wouldn't be able to win but I am sure there was quite a bit of disappointment in the sales department. The first console generation Sony entered, Sony won.

Re:MS is nervous

[rwven]

that "niche" is outselling microsoft AND sony right now. I think your information is deeply flawed...

Re:MS is nervous

[PainKilleR-CE]

When Sony jumped into the market with the PSOne, they didn't have a long term plan to slowly take market share away from Nintendo and Sega - they aimed to corner the market for that generation and move on from there. I think that you're overstating the future for the XBox - it certainly could go down the way you describe but it's not as likely as it seems you believe.

There's a difference between the market Sony came into and the market Microsoft came into, though. Sony saw a market that wasn't being reached by either Nintendo or Sega: 16-25, or even older, males that grew up with Nintendo and Sega but wanted something 'cool' instead of the same old stuff. They also saw that Sega had some of the right ideas (at the time) with arcade ports, and Sony made an arcade version of the PS1 to make those ports easy (much like Sega did with some of their consoles). Further, Sony saw that the optical discs could work if you used a memory card to store data. Then Sony signed up Square and sealed the deal with a lot of the previous Nintendo owners that wanted to see more FF games, and FFVII surpassed expectations for sure, bringing in many people that had never played any of the 6 games before it.

Microsoft, on the other hand, saw a market with potential to get them into people's living rooms, especially with Sony marketing their machines with CD and DVD player functionality. Microsoft stepped it up by letting you rip your CDs to the hard drive and letting you save games on the hard drive, reducing the memory card to a system for transporting saved games rather than actually saving them in the first place (which may have hurt MS in terms of all of those nickel-n-dime peripheral purchases other console makers thrive on). MS didn't have an untapped market they were aiming for, they were just trying to get the machines in people's homes, and get developers to put games on the machines.

I don't think Microsoft is going to be a company that gets a devoted following (like Nintendo) since they have not really been a great first person game developer (outside of the third party companies that they've bought) so they're not going to have a guaranteed base they can work from.

It's unlikely unless their in-house developers (those third parties they've bought) produce some memorable franchises that people want to see more of. Perhaps Halo can do that, but I'm not really sure, and though I remember the original Crimson Skies, that's certainly not the appeal of the new game for me. KOTOR, well, they'll never own Star Wars ;)

whatever happened to the redesigned xbox?

[*weasel]

the smaller, lighter, cheaper one that's been rumored?

if MS is going to beat Sony's ps3 to market with their xbox next, they're running short on their window to release a refresher product.

particularly with their less-than-dominant market share, one wouldn't expect it to be worth the investment to redesign the thing if it's only going to be on sale a few months ahead of the xb2.

i'm thinking that the redesign is the only hope for further US price cuts.

Re:whatever happened to the redesigned xbox?

[PainKilleR-CE]

if MS is going to beat Sony's ps3 to market with their xbox next, they're running short on their window to release a refresher product.

The PSOne redesign was only released about a year before the PS2, I don't see why we'd expect redesigns of current-generation products before the end of 2004 given that the next-generation consoles are expected in the 2005/2006 timeframe. Afterall, the redesigns are usually about taking advantage of the consolidation of the various parts in the system (something that the XBox can't really take as much advantage of given the fairly standard PC parts, though it could use smaller drives and a smaller motherboard) to release something smaller (and cheaper) for the low-price end-of-life run before, during, and after the release of the new system, not about revitalizing the product line in it's mid-life while it's still the current generation.

Re:whatever happened to the redesigned xbox?

[buffer-overflowed]

Even if we see developer support shift to the GC, there is a 1-2 year lead in on games development. Any gains in that area aren't going to be realized until just around the time of the next console generation.

So, this holiday season will probably determine who finishes at number 2 at the end of this generation.

Er --- isn't $155 less than the cost of the HD?

[Snafoo]

How big is the hard drive in the X-Box? How much do hard drives of that size run for these days?

Re:Er --- isn't $155 less than the cost of the HD?

[zulux]

How big is the hard drive in the X-Box? How much do hard drives of that size run for these days?

This is what is killing the XBOX. Manufacturers have a finite amount of space on their factories, and not one of them is willing to make a 8 gig hard-drive for Microsoft's XBOX when they could be making 120 gig hard-drives for DELL - UNLESSS Microsoft is willing to pay roughly the same price as a 120 gig drive.

If drives were sold by the Gig then the XBOX drive should cost $8 - (WD and Maxtor both sell a 250 Gig drive for $250 - that $1 a Gig) - but nobody will sell a drive, even at the smallest of sizes, for less that $50.

Re:Er --- isn't $155 less than the cost of the HD?

[PainKilleR-CE]

The same thing goes with the other parts in the XBox.

Is Intel going to keep making 733MHz CPUs for anything less than a premium? Of course not, they probably aren't producing anything under 1GHz any more. Plus, if I remember correctly, there were some differences between the XBox CPU and a standard CPU, though not major, which would also increase the costs. The slowest Intel CPU you can buy at any given time is usually not much less expensive than the slowest current-generation CPU available.

Do you think nVidia's still producing a lot of GF3-era hardware when the GF4MX has taken over even the GF2MX's price points? They have GF4s and the GFFX to cover the mid- and high-end price points, with even some of the GF4 Tis slipping into the low-end.

This is also the major reason that ATI is probably a better choice for most consoles (as an off-the-shelf processor), because ATI has dealt with OEMs for most of their existence, and those people like to have chips available for a while (though not as long as consoles in most cases, still a lot longer than you might be able to find the same chips in cards on store shelves).

In the end, this is probably why Microsoft licensed technology from IBM rather than awarding a contract to produce the chips, since they could probably outsource chip production (or even do it themselves) over the long term for less than having IBM produce the chips indefinitely as all the rest of IBM's lines upgrade for new chips for Apple and others.

Just think, even if MS is buying single-platter drives, how many hard drives are being produced with 8GB platters? Not very many, since that would only produce 16 and 24GB drives, and it's unlikely you could buy a new 24GB drive for $24.

Of course, they're getting better prices than end-users normally see, but it still adds up to a loss (though smaller than the numbers most people throw around, even at launch the most detailed estimate I saw put it closer to $30-50 loss per console at $300 retail, which was, of course, at launch, rather than recently, so even with no cost reductions (and they have had some cost reductions in the manufacturing end) you're looking at $150-170 loss per console, max).

Re:Er --- isn't $155 less than the cost of the HD?

[PainKilleR-CE]

And through all this, Sony will probably devise a single-chip version of the PS2 and everyone will buy the DVD player that happens to have a PS2 inside rather than buy the PS2 that happens to play DVDs.

As it stands they've already got the 2 primary chips down to 1 chip, and they announced in the last couple of months that they're starting production of that chip on a smaller fabrication (90 nanometer iirc). This would probably lead to use in the PS3 for backwards compatibility, though they'd have to maintain the I/O chip (or put that functionality into the main chip) for the PS1 compatability. As for a DVD player that happens to play PS2 games, it seems they're more focused on higher-end electronics for things like that, notably their Tivo-like unit with DVD recording capability that just happens to also play PS2 games (the PSX).

Why not even release a PDA based on a shrunk-down PS2 core? They've already got Linux on it.

Who knows, maybe it's a heat issue, or they simply feel that their existing line of PDAs is going in the right direction.