In what's seen as the first step towards a worldwide price cut, Microsoft has slashed the prices of the Xbox 360 gaming console on the Japanese market by margins that go up to 30%. Now the Xbox 360 Arcade is cheaper than the Nintendo Wii. And many analysts, like Colin Sebastian from Lazard Capital Markets and the ubiquitous Michael Patcher from Wedbush Morgan, are saying that prices are set to fall in the rest of the world just before Christmas in a move designed to spice up the appeal of the Microsoft console over its competitors.

 

Well, I beg to differ. Cutting prices might lure some late adopters to the Microsoft-made device and the PlayStation 3 and even the Wii might get extra sales if they drop the price tag by let's say 50 dollars. But console sales have never ever been and will never be just about prices. They're about so much more than that. Even the so-called casual demographic looks at the price last, while the hardcore audience mostly ignores it. The game portfolio, ease of use, innovation, additional services, social potential, these are all aspects of a gaming console that are more important than the amount of dollars or pounds or Euros that the customer is going to pay for it.

 

Microsoft is in no dire need to slash prices. It needs to launch better console games, it needs to deliver on that promise of additional content for GTA IV, it needs to offer Xbox Live Gold memberships to all users without a fee, it needs to create a better social space on Xbox Live, with less cursing and more intelligence. In a word, Microsoft and all the other console manufacturers are in dire need of creating added value for their products.

 

So far Nintendo is the best at doing this. Even if its console is lacking in processing power and in storage space it has re-discovered a simple thing: people love to play easy games together. Here at Softpedia the Nintendo Wii is used mostly for two or four player competitive gaming where groups of people enjoy themselves in an office environment just as they enjoyed themselves playing games when they were much younger. That's added value and nostalgia in one great gaming package.

 

If it wants to lead the pack, Microsoft must change its focus from the economics to the value of gaming and I'm sure they can reshape the Xbox 360 as a competitor for the Wii without being constantly asked to slash prices.