14 DAY TRIAL // Microsoft Chief Executive Officer Steve Ballmer said that the Xbox 360 gaming console is “an absolute home run”. He believes that the recent move to cut the prices of the device to make it competitive with the Nintendo made Wii console is a sign of good business acumen and not one of desperation, as some commentators claimed.
While talking to The Mercury News, Steve Ballmer responded with calm to allegations that his company was running out of ideas in regard to its consumer goods division, including the Xbox 360 but also the Zune music players, which is not doing too well compared to the iPod domination of the segment. He quickly stated that “No, that's the craziest thing I've ever heard anybody say. All consoles start at higher prices. They always come down through the long cycle”.
The executive also left the door open for further price reductions, saying that there's no company that produces hardware and is eager to tell customers and its rivals when it is planning to cut prices. The videogaming division of Microsoft is said to be on a path to profitability, after it had posted losses ever since the Xbox 360 was launched. It's worth mentioning that the company has never revealed the costs which incurred as part of the research and development cycle that led to the creation of its gaming console.
The bottom line, to the Microsoft executive, is that “Xbox Live is going gangbusters. The console is selling well”. That's certainly true, in relation to the closest rival Microsoft has, Sony with its PlayStation 3 console. But Microsoft is gaining little to no ground on the runaway leader in hardware sales, Nintendo, which month after month manages to dominate all the charts with its Wii. This Christmas is going to be yet another test for the gaming console market, so stay tuned for further data.