Why we dropped the 360’s price

Why we dropped the 360’s price
There have been a lot of consumers waiting for this to happen because we’ve taken so long to do it, and now they will buy into the world of Xbox 360.

The Core, which we have dropped to just £179.99, still does very well for us in the UK. It’s still a big part of the mix in terms of sales. From a strategic point of view, this price point gives us an entry level that broadens our consumer base. If you look at PS3, it’s quite a lot of money for your average family.

Sony is requiring a novice gamer to buy into things like Blu-Ray and wireless gaming by default. The 360 Core is about giving people the same experience as our other consoles, but letting them upgrade when they feel comfortable doing so – and not to foot a huge bill for technology they don’t need.

With the launch of Elite and these price drops, the delta between Xbox 360 and PS3 in terms of value for money gets broader. It certainly puts us in a better position than our competitors going into the Christmas market.

Retail will start to promote the Core’s new price point, which will give us mindshare with parents and families looking to cash in on a console over the Christmas period.

We now have a very powerful, high definition console at the same price point as Wii. That will really open the door to a broad audience going into Christmas. However, to a certain extent, Wii is tapping into a different consumer.

It’s important to remember that this is the first ever price drop we’ve done on Xbox 360. The reason why we think it’s right now is the amount of games we’ve got coming up as part of our Christmas line-up.

There will be over 300 high definition games available with amazing gaming experiences for everyone – whether it’s Halo 3, Project Gotham Racing 4 or Guitar Hero III and Scene It. And with loads more to come like Rock Band and GTA IV in the New Year, it seems an opportune time in terms of software.

The Xbox 360 console is still the bread and butter of our business. It’s a key volume driver. It’s great value at £249.99 with the hard drive, and again reinforces the message of value that we want retail to communicate.

Elite is now our flagship console. Its key selling point is its 120GB hard drive, which will enable us to do lots of interesting stuff with Xbox Live.

In terms of horsepower under the lid, it’s essentially the same at the rest of the range, but if offers something that little bit special to the consumer who wants the latest technology.

It has already done very well over in the US and we expect it to do well here in Europe and the UK. Typically, we’re anticipating that those with a high disposable income who want a black, cutting edge console will be the earliest adopters.

But this will diversify as time goes on, as the system becomes particularly attractive for those who want to get involved – or at least more involved – in Marketplace downloads, movie downloads and other media.

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