Microsoft will cut prices to counteract PS3 release

Jun 21, 2006 10:30 GMT  ·  By

If you thought that nothing else will happen on the gaming console market? you were extremely wrong, as another undisclosed source emerged, this time on Microsoft's 'behalf'. The source said that the software giant intends to cut the price for its upcoming Xbox 360 in order to destroy every inch of market share PlayStation 3 may gain after so many scandals, informs Britxbox web site.

More precisely, Microsoft is said to cut prices significantly around Christmas, meaning that the customers will be able to purchase the low-end package under ?200, and the premium package at around ?220.

"A new version of the Xbox 360 would be cheaper to manufacture and debut about a year after launch. If they hit their targets, the Microsoft would be able to cut the costs of its console in the autumn of 2006. Microsoft would have the option of slashing the price of its console, just as rivals come out with their first consoles. That would put a lot of pressure on Sony and Nintendo," informed the mysterious source.

Moreover, it seems that Microsoft's Xbox 360 hardware team is already modifying the gaming console by redesigning the chips supplied by ATI and IBM in order to cut production and purchase costs and apply the strategy before Christmas, when PS3 is due for launching (November 11th in Asia, and on November 17th on the European and American markets).

"While Microsoft's cost cutting plans will be no concern to Nintendo who intend to sell the Wii for under ?200 anyway, it's certainly a concern for Sony who's Playstation 3 is going to cost over ?400. And with the hundreds of pounds difference in the price at the moment, Microsoft might not even need to reduce the price," the source added.

Two days ago, Sony's PlayStation 3 (PS3) was announced to be already on sale on a web site - play.com - even if the manufacturer previously said that it will not launch its gaming console on the retail market up until November.

Unfortunately, the console will not be sent to the commissioner before Christmas due to an extended European shortage. Furthermore, the next generation consoles will be purchased as 'pre-orders' for ?550 ($1,020) from the online shop play.com.