Xbox 360 price set to crash?
Up to $80 off, analyst reckons
Hot on the heels of Sony's recent $100 60GB PS3 price drop, gamers and industry analysts the world over are predicting that Microsoft will soon announce a cheaper Xbox 360.
Micheal Pachter, a Wedbush Morgan analyst who has gone on the record to predict a price drop, claimed that Microsoft will reduce the Xbox 360's prices across the range. He said this will see the Core and Premium models' prices both drop by $50 to $249 and $349, respectively, and the black Elite by $80 to $399.
One way Microsoft could achieve this is by reducing its production costs for the Xbox 360. It has been rumoured for some time that Microsoft is working on a cost-reduction project, codenamed Falcon. This could see the Xbox 360's core processor and graphics chip components swapped over to a 65nm production process from the larger 90nm process currently used for the console's chips.
This would allow the Xbox 360 to deliver the same level of performance, but with less heat as a byproduct, in turn allowing Microsoft to fit the console with a cheaper cooling system than it does at present.
Heat levels within the Xbox 360 have already caused Microsoft some substantial financial problems.
Of course, Microsoft has denied any potential price cuts for the console... just as Sony was doing mere days before announcing the $100 price reduction.
Earlier this week, Darren Huston, corporate vice president at Microsoft, said it had no plans to drop its prices in Japan, stating that the console's Japanese price is "very competitive". This despite the console's poor showing in the H1 2007 sales tally there.
Price in Argos?
The bundle deals with the 360 have got more and more impressive. The last I looked, I could get pretty much the two hottest chart titles free at any time, the deal updating whenever something new and big came out. Which has got to be worth at least £50 or so off the console, should Microsoft decide that the US gets a price cut and we get one too.
How will that affect the price at Argos?
Right now an X Box costs £279.99.
Will we see a cut in price in the UK, and will reghardware.co.uk tell us? Or will we just hear about events in foreign countries?
Doubt Microsoft are reducing their profit by 3%, more likely they are increasing their hardware loss by 3%, so that more people buy the console. If more people buy the console, more people buy games, and that is where the money comes from on consoles. Making it to a 65nm process may instill more confidence in it's reliability, possibly increasing sales as well
Right now, the yields on 65 nm are both per centage wise less than 90 nm, but yield less die per wafer. So, short term, MS will either be paying more per die, or will be pounding on the vendor for bigger discounts.
Going from 90 nm to 65 nm doesn't really give you that much better of a price reduction. And the cooling issues are nice, but probably won't be much. I doubt they will be $80 worth. MS is just going to cut their profit by 3%.
Sources close to Microsoft stated...
... "The necessary reduction in price to bring the XBox360 in line with the market has been calculated to be around... oh B*GGER, my PC has crashed... hang on a second... no wait, it's re-booting... no don't go away, it's got Vista and everything... will you wait if I tell you it uses PowerBoost... don't think you can come back after I've gone home and hack my workstation, I've installed Bitlocker.... oh SH*T the Windows Genuine Advantage thinks it's an unlicensed copy and disabled everythig... please come back... I've got a calculator in my jacket that uses embedded Linux..."