Slashdot Mirror
Microsoft Readies Cheaper 360
Officially Microsoft is putting on a brave face, saying they won't drop the 360's price even in the console's weakest market: Japan. Just the same (probably in anticipation of Sony's PS3 price drop), the San Jose Mercury news says the company is secretly working on preparing a lower cost Xbox 360 SKU. Called 'Falcon', it's a cost-reduced system using 65nm chips instead of the at-launch 90nm electronics. This ties right into Michael Pachter's expectation of such a cut; it should be noted he doesn't see the DS or Wii prices moving any time soon. Related to all of this, Newsweek's LevelUp blog has two great interviews today: a Peter Moore discussion harkening back to last week's warranty announcement, and a chat with Jack Tretton about the price cut and the 360's hardware issues.
"it should be noted he doesn't see the DS or Wii prices moving any time soon"
Ermmm... the wii is half the price! A Price cut is not necessary becauser the wii is sooooooooooooooo much cheaper anyway.
they should focus on getting the HD-DVD right in a cheap package for the sake of killing blu(e?)ray. The Xbox 360 elite seemed to be a bit of a screwup making a slightly nicer new console and ruining the price advantage with the ps3 without much extra. Still you'd imagine this *has* to happen with more cost-effective building because even though the 360 is a very nice console they're still losing a lot of $ on the bottomline.
Imagine the losses Sony endures after they cut their price with additional $100. And now the competition leaves them in the dust again. Let's say MS puts the price with $50 down (let's be conservative right). Note, the prices have been de-retardified for better comparison:
Wii: 250 usd
360: 350 usd
PS3: 500 usd
And the killer feature for each console:
Wii: totally new way to control games
360: the best online gaming experience of all consoles
PS3: Blu-Ray
Notice: PS3's killer feature isn't gaming related one. One reason gamers aren't very excited about it...
$rant = "Stop using SKU in everyday conversation."
For those of you who need it spelled out, run this at the command prompt: perl -wc split ('', $rant)
The correct term is 'model'.
Back in May there were articles floating around that Microsoft expected the Xbox division to be profitable in 2008. However, they've recently decided to offer an extended warrenty to customers in order to deal with the high failure rate of the Xbox 360. An earlier Slashdot article has this estimated to cost Microsoft around one billion dollars.
The earliest reports pegged the Xbox as costing about five hundred through seven hundred dollars to manufacture, a loss of a few hundred dollars on each console sold. This article published around the time of the PS3 launch puts the cost of Xbox 360 components at around seventy dollars under the final unit cost (manufacturing and other costs were not calculated into this figure so it may be safe to assume that they were breaking even or close to it at that time).
With the costs of the new warrenty (in addition to any costs that can be associated with the honoring existing warrenties to cover the high failure rates of the console) and cutting the price which changes the profitability on each unit sold, when does Microsoft now expect their Xbox division to become profitable?
And your prediction would probably be wrong. They are STILL having trouble keeping the Wii in sufficient supply on the store shelves in some areas, so why lower price? It's the basic principle of supply and demand. If supply is too much and demand is weak, lower the price to change the sweet spot on the supply demand curve so they are more equal. The wii is not over-supplied (yet) and there is still sufficient demand, so lowering the price would be a stupid move for Nintendo.
At this point i'd say the 360 needs to do a $50 price drop to really keep the edge against Sony in the console wars. They are probably a lot closer to producing not at a loss at this timeframe in development too, so they should be able to afford a $50 price cut. I think Sony will be losing even more money as their manufacturing surely hasn't dropped in price that much from when they launched last fall.
"To strive, to seek, to find, and not to yield." - Tennyson
How did Xbox 360 customers get screwed? I just got a free 3-year warranty on a machine that functions perfectly-- not my definition of "screwed."
Comment of the year
Why is it considered a given that Nintendo will not enter into this price war?
Companies drop prices to increase sales. Since launch, Wiis have been selling as fast as Nintendo can make them, with no signs of that letting up. Lowering the price would just mean less profit for Nintendo.
I would think that anyone who's paid attention the electronics/computer world for the past couple of decades would have come to terms with the fact that the "biggest and best" is a quickly moving target, and the fact that something newer comes out doesn't mean that what you bought six months ago suddenly stops working.
You might "feel" like you got ripped off, but you really didn't. It's definitely possible to not worry about such things, and so that's what I'd advise, because worrying about it isn't going to accomplish anything positive anyways.
One time I threw a brick at a duck.
The 360 "Elite" didn't fix the reliability issues, what makes anybody think that this new version will be any more reliable? Microsoft has had 20 months since launch and they still can't ship reliable consoles.
He posts anonymously on /. with his elitist attitude about entertainment, and that makes him mature.
Some people enjoy pointing out how "immature" or "childish" someone else is, or their choice of entertainment. Generally, in conversation, these people also point out how mature they are all the time -- it's insecurity, like those homophobic wankers who point out how "gay" this or that is all the time. Basic projection and insecurities.
To me, it's a true sign of creativity to make something enjoyable by different ages. It's very hard to make something that children can understand and enjoy that also captures the attention of adults. Anon probably hates on Harry Potter*, but it's "immature" entertainment that many people of varying ages enjoy. The Wii does this: People of all ages enjoy it. It's not aiming to be the same as other consoles. I think this pisses off fanboys of other consoles, like the Anon in this case.
Simple fact is, the Wii is selling, despite not being the elite graphical engine in the bunch. Because it appeals to a larger audience than the PS3 or X-Box (at the 1 year mark, see where the Wii stands compared to the 360 and PS3 sales -- November isn't that far off...). This doesn't mean the other consoles are bad (though I dislike Sony and think they really screwed up this generation), just different. Some people are just weird and have to hate anything that competes with their precious. Anon is, with all probability, a rabid Playstation fan who is extremely pissed that the little old Wii is kicking the snot out of the PS3. It's no longer "in" to hate on Nintendo -- grow up.
*I've never read a word of Harry Potter, myself, but I don't hate it.