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US Xbox price cut to $149

North America first: rest of world next?

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Microsoft has slashed the price of the Xbox in America to $149 in a move which will take effect as of tomorrow, while certain evidence suggests that the cut may also be extended to other territories.

The price of the Xbox will drop to CA$199.99 in Canada, marking a similar reduction to the US price cut, while a steeper drop will take effect in Mexico, where the price is set to fall some 500 pesos to 1,999 pesos.

The news follows months of speculation over expected price cuts for the Xbox and PlayStation 2, which have been widely anticipated by analysts and senior publishing executives alike since late last year.

The move is expected to provide a significant boost to console sales over the coming months, and may also signal an imminent price cut for Sony's PlayStation 2, which is now by far the most expensive console in the North American market.

However, Wedbrush Morgan analyst Michael Pachter cautioned against expecting a PS2 price drop too soon, pointing out that Sony is unlikely to cut the price of the console before mid-April; to do so would cause difficulties for its accounting in Japan, as it would fall within two weeks of the close of its financial year.

Meanwhile, comments from a Microsoft Australia spokesperson who told ZDNet that an announcement regarding the Xbox console will be made tomorrow have raised suggestions that the price drop could also take effect there, with a simultaneous price drop being made in a number of global territories tomorrow.

A report from US analysts Piper Jaffray last week suggested that Xbox unit sales could grow by a factor of four to five times in the six to eight weeks following this price drop, as compared with the weeks previously ahead of the drop.

However, report author Tony Gikas cautioned that despite hardware price cuts, it's unlikely that 2004's console sales figures will match last years'. "We doubt a $149 price point will be enough to drive (calendar 2004) hardware unit sales above 2003 levels," he commented in the report.

Copyright © 2004,

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