Microsoft: Console Sweet Spot is $199, But No Xbox 360 Price Drop

Microsoft may sell the most Xbox 360s at below $199, but it's not going there any time soon

Microsoft’s plot to jump the gun on its foray into the current generation of video game consoles by releasing the Xbox 360 a full year ahead of Sony’s machine appears to be paying off. Developers have had more time to develop software for Microsoft’s system, giving it the current edge in games available.

While Microsoft may be pleased with itself on keeping Sony’s PlayStation 3 at bay, now the company must focus on stealing some of Nintendo’s thunder. The Wii’s innovative remote controller allows it to attract a whole new audience, such as women and the elderly, to play video games.

In order to rule this console generation, Microsoft believes that it needs to start emulating some of Nintendo’s tactics. “If we don't make that move, make it early and expand our demographic, we will wind up in the same place as with Xbox 1, a solid business with 25 million people,” said Peter Moore, a Microsoft marketing VP. “What I need is a solid business with 90 million people.”

To help expand the demographic, select Xbox 360 marketing will take a more family friendly approach releasing more family games and redoing retail displays to emphasize games aimed at children, reports Bloomberg.

“If you don't start building that content and reputation it never comes,” said Albert Penello, director of Xbox global platform marketing. “I don't want to be pigeonholed as a hard-core machine.”

Microsoft also may do something about the price, as it sees the Wii’s relatively lower price point of $250 as a “strong value proposition,” said David Hufford, a director of Xbox product management.

“When mom walks into the store and sees she can get a console with a game for $250, she sees it as a $300 value,” Hufford said with regards to the Wii. “They've done a good job.”

Microsoft may be looking at a price below $200, as Hufford says, “We are well aware that the sweet spot of the market is really 199 bucks.” According to the story, Sony sold 75 million PlayStation 2s at or below $200, making up about 80 percent of all PS2s sold.

Hufford’s comments shouldn’t be taken as any immediate signal of a price drop, however, as he clarifies with the Microsoft Gamerscore blog, “With Xbox 360s selling well at their current price point, Elites selling out at $479, and an insanely great portfolio of games in the market, there’s no reason to announce any kind of price drop anytime soon.”

Reference:Marcus Yam,dailytech