Microsoft Xbox price cuts won't make much difference

Posted Jul 25th 2007 10:59AM by Douglas McIntyre
Filed under: Analyst Reports, Rumors, Products and Services, Industry, Competitive Strategy, Microsoft (MSFT), Sony Corp ADR (SNE)

Rumors are that Microsoft (NASDAQ: MSFT) will cut prices on its Xbox 360 by another $50 in August. Whether the cut could affect all versions of the game console is unclear. Several major games including the new Madden football product will be out later next month. A price cut might capitalize on gamers visiting stores to view the new goods.

Or, it may be that Microsoft simply looked at Nintendo Co.'s (OTC: NTDOY) latest earnings. Profits were up over three-fold and the company increased its operating profit projection for the fiscal year ending March 2008 to $3.1 billion. The company now says it will sell 16.5 million Wii game consoles in it current business year and 26 million DS portables.

Research group NPD's latest number which cover June game console sales in the US show 381,800 Wiis sold compared with 198,400 Xbox 360s and 98,500 Sony (NYSE: SNE) PS3s.

A $50 price cut may not make much difference.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Tags: inthenews, Nintendo, PS3, Wii, Xbox