Microsoft to cut price of Xbox 360 to compete with Wii game console
LOS ANGELES: Microsoft plans to cut the price of its Xbox 360 game console to compete with Nintendo's top-selling Wii.
The company needs to lower the price of the Xbox, which retails from $299 to $479, to increase sales and lure customers who are not interested in traditional combat and racing video games, said Shane Kim, vice president of Microsoft Game Studios.
He declined to say when a price cut might be announced, but added that it would not happen at the annual Electronic Entertainment Expo, or E3, game conference in Santa Monica, California.
"We need to compete effectively for that customer, and part of that is getting to the mass market price point for the console," Kim said Tuesday. "We definitely are working on that area."
The Xbox 360 has trailed the $249 Wii in sales since Nintendo introduced the player in November.
This week, Sony lowered the price of the PlayStation 3 console, which has lagged behind both Xbox and Wii, by 17 percent to $499 from $599 in the United States. Microsoft has vowed to make its video-game business profitable by next year.
"A price cut would give the Xbox 360 an advantage over its rivals, particularly in North America where you have a choice of consoles to play the same game," said Etsuko Tamura, an analyst at Mizuho Investors Securities in Tokyo. "There's a lack of Xbox titles in Japan, so a price cut here would have no effect."
In fiscal 2006, the games unit lost $1.26 billion on sales of $4.26 billion. David Hufford, a director of Xbox product management, said last month a price cut was needed to persuade parents to buy the machine for their children.
Microsoft also said that Walt Disney would offer films for rent through its Xbox Live online service. Warner Bros. and Paramount studio already sell and rent movies on Xbox Live.
