Microsoft Announces Two XBox versions priced at $299 and $399
Tags: Microsoft, Sony, Games, Gaming, XBox 360, Playstation 3, Marketing
As we predicted yesterday, Microsoft confirmed today that it will sell two version of XBox 360 for $299 and $399 in the US. Some marketing details are interesting though. The less expensive version eliminates the hard disk, the high-definition output cables, the headset, and the wireless controllers that the more expensive version includes. That said, we still believe that the low-end version will be both unattractive for most buyers and difficult to buy simply because both Microsoft and retailers will prefer to sell their limited stock of consoles this Christmas at higher prices.
Microsoft also announced that the XBox 360 will sell in Europe for prices of 299 and 399 euros. Given the current exchange rates, that appears to be a reasonable markup to allow for value-added taxes imposed by European countries.
Also of note today is the fact that Microsoft has hired another contract manufacturer to build XBox 360s. But this new addition to the two existing manufacturers won't help with supply constraints this Christmas; they aren't expected to start production until 2006.
Of more interest from a strategic point of view is the issue that the fragmentation of the XBox 360 console market. Purchasers of the lower-end console will have to be careful to check game requirements to ensure that the game will run on the lesser configuration. And developers will now have at least two versions of the platform to test against, and maybe more. Given that it is unlikely that XBox 360 will ship with the HD-DVD drives that have been speculated as part of the console, there may be even more XBox 360 configurations in the future. Given the backward compatibility issues previously noted, namely that original XBox disks are unlikely to run unchanged on XBox 360, and certainly won't run on the less-expensive XBox 360 without the optional hard disk, Microsoft appears to be sowing the seeds for serious consumer confusion and dissatisfaction when buying XBox games at retail.
As we predicted yesterday, Microsoft confirmed today that it will sell two version of XBox 360 for $299 and $399 in the US. Some marketing details are interesting though. The less expensive version eliminates the hard disk, the high-definition output cables, the headset, and the wireless controllers that the more expensive version includes. That said, we still believe that the low-end version will be both unattractive for most buyers and difficult to buy simply because both Microsoft and retailers will prefer to sell their limited stock of consoles this Christmas at higher prices.
Microsoft also announced that the XBox 360 will sell in Europe for prices of 299 and 399 euros. Given the current exchange rates, that appears to be a reasonable markup to allow for value-added taxes imposed by European countries.
Also of note today is the fact that Microsoft has hired another contract manufacturer to build XBox 360s. But this new addition to the two existing manufacturers won't help with supply constraints this Christmas; they aren't expected to start production until 2006.
Of more interest from a strategic point of view is the issue that the fragmentation of the XBox 360 console market. Purchasers of the lower-end console will have to be careful to check game requirements to ensure that the game will run on the lesser configuration. And developers will now have at least two versions of the platform to test against, and maybe more. Given that it is unlikely that XBox 360 will ship with the HD-DVD drives that have been speculated as part of the console, there may be even more XBox 360 configurations in the future. Given the backward compatibility issues previously noted, namely that original XBox disks are unlikely to run unchanged on XBox 360, and certainly won't run on the less-expensive XBox 360 without the optional hard disk, Microsoft appears to be sowing the seeds for serious consumer confusion and dissatisfaction when buying XBox games at retail.
posted by Carl Howe at
11:38 AM
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