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Microsoft responds to PS3 slim with a 360 price drop

Brian Ambrozy August 28, 2009 10:20 AM ET in Gaming

Well this comes as absolutely no surprise at all. Microsoft really had no choice in the matter: The Xbox 360 Elite 120gb is now $299. Effective immediately.

This is where we get into the realm of “it’s a great time to be a gamer”. The PS3 Slim at $299 is a great deal. The Xbox 360 Elite at $299 is a great deal. Just this week, Bobby “UPSLynx” Miller visited ICHQ for a few days; he and I sat on the couch and played 360 exclusive Castle Crashers from start to finish in one four-hour sitting. It was a complete free-for-all riot and we had a total blast. This was after Bobby excitedly sat down and linked his current Games for Windows Live profile to my 360 and was delighted to discover that the achievements and gamer score linked seamlessly.

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54 Comments:

  1. lordbean
    404 Brain Not Found
    28 Aug '09, 11:45 am

    For that price, I might almost think about a 360. I dread the RROD problem though... is the 360 elite subject to that, or was it fixed?

  2. Brian Ambrozy
    The Icrontic Guy
    28 Aug '09, 11:46 am

    It's been fixed for over a year now.

  3. Cliff_Forster
    Keepin it real
    28 Aug '09, 12:23 pm

    I saw a model with a mfg serial in 2008 Red Ring not too long ago. I'm 1 for 6 on 360 hardware (son has a model circa 2008 that still works, for now)

    I honestly think Microsoft is going to have to do more if they want to run neck and neck with the massive loss leader that has become the PS3 slim. If not straight price, perhaps a compelling game bundle or something.

    I think the tide is about to turn Sony's way again.

    Now, What about that Wii price? It has been the darling of the console gaming industry for a while now, but with the HD consoles so close to it? Nintendo does have a highly differentiated product offering, that is how they have been able to maintain their price in the market, but with the pressure on, perhaps we will finally see a cut there?

    This also leads me to wonder how ATI and Nvidia will position their next generation gaming products in Fall? Evergreen especially. With the console price cuts, will they be able to demand a real old school premium for high end graphics tech, or will they scale pricing to compete in hopes to re invigorate the PC gaming market with the release of Windows 7.

    Watching this all unfold in Fall/Winter is going to be very exciting.

  4. Snarkasm
    The Photographer.
    28 Aug '09, 12:26 pm

    The Wii market is pretty saturated anyway. Not sure a price drop will do much for them.

    That said, I think Netflix and Live are incredibly compelling next to Blu-Ray and the abomination that is PSN. Sorry, but it sucks out loud compared to Live, and Netflix lets you stream multiple movies per month for less than the cost of a single BD.

  5. Thrax
    Cad
    28 Aug '09, 12:45 pm

    It's entirely possible. Xbox 360 units using the Jasper mainboard that fixed the RRoD issue did not appear in retail until June of 2008.

    Quoting Cliff_Forster

    I saw a model with a mfg serial in 2008 Red Ring not too long ago. I'm 1 for 6 on 360 hardware (son has a model circa 2008 that still works, for now)

    I honestly think Microsoft is going to have to do more if they want to run neck and neck with the massive loss leader that has become the PS3 slim. If not straight price, perhaps a compelling game bundle or something.

    I think the tide is about to turn Sony's way again.

    Now, What about that Wii price? It has been the darling of the console gaming industry for a while now, but with the HD consoles so close to it? Nintendo does have a highly differentiated product offering, that is how they have been able to maintain their price in the market, but with the pressure on, perhaps we will finally see a cut there?

    This also leads me to wonder how ATI and Nvidia will position their next generation gaming products in Fall? Evergreen especially. With the console price cuts, will they be able to demand a real old school premium for high end graphics tech, or will they scale pricing to compete in hopes to re invigorate the PC gaming market with the release of Windows 7.

    Watching this all unfold in Fall/Winter is going to be very exciting.

  6. Johnell
    Guest
    28 Aug '09, 7:20 pm

    To anyone thinking of getting a game system. Get a Ps3 its better trust me. The machine is just better in so many ways. The Ps3 and 360 are the same price now. Why would you buy a 360 when the Ps3 has Bluray,Wifi,Bluetooth,Web Browser and the best exclusive gaming. Pretty much everything the 360 doesn't.
    The Ps3 is a complete media Hub unlike the 360. You fanboys can say we have Net Flix so what streaming quality is nowhere near the picture quality of a Bluray disc. Not to mention the disc is mine to own. If I buy a movie from Playstation Network it's mine to own, unlike the 360.
    The 360 has no true Hi-Def picture capabilities. It only has HDMI 1.2 the Ps3 has HDMI 1.3. The 360 has Dolby digital 5.1 suround sont the Ps3 has Audio output: LPCM 7.1ch, Dolby Digital, Dolby Digital Plus, Dolby TrueHD, DTS, DTS-HD, AAC.
    The Ps3 is just a better machine and it's reliable too wich should be the main concern when buying electronics. You fanboys better not say the Ps3 dont have games. Your exclusives can't compete with ours at all. When the 360 can offer something better than Uncharted,Killzone,GT5,Infamous,MGS5,LBP and these are only a few what are you gonna throw at me Halo and Gears. Lol! If at fist you dont suceed try again.

  7. Snarkasm
    The Photographer.
    28 Aug '09, 7:23 pm

    Get out of here, fanboy. I won't even bother refuting everything in there.

  8. Cliff_Forster
    Keepin it real
    28 Aug '09, 8:31 pm

    Snark,

    Johnell is a PS3 fanboy, so what? He gave a few compelling reasons for his preference.

    Being a fanboy is not a crime. Johnell digs the PS3, and from a technical standpoint, and now from a cost standpoint it makes a very compelling case when pitted against the 360.

    Now, Johnell, one thing I would urge add, have you considered gaming no PC? If not I highly recommend it.

  9. Thrax
    Cad
    28 Aug '09, 9:18 pm

    Maybe not a crime, but ignorant and obtuse.

  10. Crazy Joe
    Cousin Zeke
    28 Aug '09, 9:23 pm

    One of the other reasons that I do not want a PS3 as a blueray player is that my Harmony remote will not work with the PS3 without an extra adapter at extra cost.

  11. Brian Ambrozy
    The Icrontic Guy
    28 Aug '09, 10:03 pm

    Why would you pit one console against another?

    That's like pitting one movie against another. You can like A, B, either, or.

  12. Gnome Queen
    Ms. D
    29 Aug '09, 1:55 am

    I prefer Q.

  13. Cliff_Forster
    Keepin it real
    29 Aug '09, 11:14 am

    There was a time when the argument was impossible to have. I could not argue that my Atari 7800 was going to provide an experience superior to the Nintendo Entertainment System. These days, all three options are compelling in their own ways, it can be easy and kind of fun to plant your stake in the ground and choose a side. Frankly, there is nothing obtuse about that, its the exact opposite of obtuse.

  14. NiGHTS
    Givin'em the business...
    29 Aug '09, 11:32 am

  15. Snarkasm
    The Photographer.
    29 Aug '09, 11:35 am

    Basing your argument on falsities and pure, unadulterated opinion is obtuse. You can't use phrases like "best exclusive gaming," the 360 has "no true high-def picture capabilities," or that buying a movie from PSN is different from BUYING a movie from XBL. Sorry, fanboys - all your arguments immediately become invalid when you have to wade through propaganda like that.

  16. Cliff_Forster
    Keepin it real
    29 Aug '09, 12:04 pm

    Five out of the six 360's I have had have failed.

    Nothing obtuse about that....

    I kinda hold a grudge when I'm sold junk, I'm just crazy like that.

  17. Snarkasm
    The Photographer.
    29 Aug '09, 1:28 pm

    You're an outlier. Welcome to statistics 101.

    Everybody's sorry you've had such a crappy time, but MS has fixed every one of them for free, hasn't it?

    When only 3% of people won't buy your console because of hardware failures, that should give you a pretty good idea of how loyal people are to the experience - the games library, the backwards compatibility, the online experience all matter more to them than being without their console for 2 weeks.

  18. RyderOCZ
    OCZ Guru / IC Groupie
    29 Aug '09, 1:51 pm

    You do realize you sound like just as much a fanboy for the other side Snark?

  19. Snarkasm
    The Photographer.
    29 Aug '09, 2:08 pm

    Somebody's gotta balance it out. At least my arguments present facts.

    I have both, I like both - I can't stand fanboys.

  20. lordbean
    404 Brain Not Found
    29 Aug '09, 2:40 pm

    i r steme fanboiz.

    Except not. I game on my PC, but the only reason is because my parents raised me with computers, and actually forbade consoles in the house. Call it parental training. At this point in life, I'm so used to the keyboard / mouse interface that me trying to play an FPS on a console controller is sort of like a baboon trying to write a thesis.

  21. Chyron
    Guest
    29 Aug '09, 9:42 pm

    Gamefaqs just hosted a survey that put the xbrick's failure rate at 54%. I cant see how anyone would defend microsoft and say they make a good product. Not to mention they dropped support for the original 6 months before the 360 came out which is a huge f u to anyone who bought it, where sony still supports the ps2. Buying a sony product is a long term invesment, buying a microsoft product is buying a testbed for the next product they plan to gouge you on.

  22. Thrax
    Cad
    29 Aug '09, 9:55 pm

    (I own no consoles)

    Except for that whole 3-year warranty, and console lifecycle that's equal to the PS3's lifecycle, you're right.

  23. Snarkasm
    The Photographer.
    29 Aug '09, 11:18 pm

    Sony still supports the PS2 SO MUCH that they removed PS2 backwards compatibility from the PS3 so they could continue to sell people PS2s.

    At least MS supports nearly all (and definitely all of the most popular) first-generation Xbox games on the 360.

    The failure rate you mention comes from a 5,000-person online survey from a gaming publication - hardly a scientific number - and as Thrax mentioned, both of them are claiming to have a 10-year lifecycle, even though the PS3 got a major redesign one year (40 and 80GB PS3 revision) and two years (PS3 Slim) into the cycle and the 360 came out with the Elite and is removing the Pro.

    I guarantee new consoles from both of them will be out before 10 years from their respective launch dates either way.

  24. Gargoyle
    We can't stop here...
    29 Aug '09, 11:34 pm

    So, in summary:

    • The 360's failure rate is high, regardless of whose statistics we use. How high is a moot point, because:
    • People are apparently not mad enough about the failure rate to stop buying Xboxes as a group.
    • Individuals are welcome to not buy into a platform they're not comfortable with, for whatever reason.

    There. Is there anything else to say on the matter?

  25. Thrax
    Cad
    29 Aug '09, 11:36 pm

    And most importantly:

    • Xbox 360 units produced after July, 2008 contain the Jasper mainboard which eliminated the cause of the RRoD issue.
  26. ledbetter
    Emotionally Invested
    30 Aug '09, 1:56 am

    I will give MS credit. When they build a POS, they stand by it!

  27. Cliff_Forster
    Keepin it real
    30 Aug '09, 3:58 am
    Quoting Thrax

    And most importantly:

    • Xbox 360 units produced after July, 2008 contain the Jasper mainboard which eliminated the cause of the RRoD issue.

    The product launch was in Nov 2005 so they more or less beta tested inferior product on the public for nearly three years.

    I'm just saying, if someone on the Sony side of the argument (I'm honestly not), were to say, hey look at the MS track record here, you can't say, well that boo boo is all better now and have an argument that is any more or less valid than theirs. All I know is this, I'm 100% done with the 360, I'll never spend another dime on it. The fact that thing was generating and retaining enough heat at one point to bend a printed circuit board enough to render it useless just turns me off, fixed or not.

    Moving on,

    We could have a whole other article on the perceived value of backwards compatability. I used to think it was a huge deal, but I find that once I discover all those sexy new current gen games, I rarely go back to the last gen experience. I think for console gamers, especially at the launch of a new system, its important for them because they feel like if they can't have that backwards compatible system their previous investments will all be wasted. Fact is, the value of a game is in the amount of joy that it gives you while you play it, and lets face it, who really is sticking their old copy of Jak and Daxter into the PS2 just for kicks? Now, I'm not a backwards compatibility champion by far, but I would say if backwards compatability is what you want, you should be gaming on Windows. Windows is the ultimate backwards compatible gaming platform.

  28. ardichoke
    King Banana Spanner
    30 Aug '09, 1:31 pm

    I'm sorry Cliff but you may have gone off the deep end with your backwards compatibility argument this time. I still love playing a number of my PS1 titles (MGS, FFVIII, Xenogears, THPS2, Parasite Eve, all classics in my mind and games I play every now and again). Since the PS3 doesn't have compat for PS2 titles (last I checked it does for PS1 titles at least) I won't be ditching my PS2 for a long time as I have a large investment in games, some of which I still haven't gotten around to beating. As for Windows backwards compatibility... are you kidding? Some software producers can't even produce NEW games that don't effing crash like a 16 year old driving drunk. Don't even get me started on the classic games that I can't get to run reliably on Windows Vista/7. Windows is only as backwards compatible as the patches released by the game developers let it be...

  29. Gargoyle
    We can't stop here...
    30 Aug '09, 2:03 pm

    I've been pretty upset about Sony removing PS2 compatibility in the PS3s for awhile now. But now with the PS3 price drop, I'll probably just buy a slim PS3 and a slim PS2 to replace my dying release-version PS2. It would have been nice to reduce console clutter under the TV, though. It also would have been nice to play with Linux on the PS3, but realistically, I probably wouldn't have actually done it.

    I hope one day PS2 emulation is as effective as PS1 emulation. I want a "forever" solution to playing these games that have become classics to me.

  30. Koreish
    Agent of Chaos
    30 Aug '09, 2:49 pm

    Simple solution to this argument. Buy a Wii, super cheap, backward compatibility, huge library of games, doesn't break down or overheat. Clearly the Wii is superior to your fancy boxes and stations.

  31. Brian Ambrozy
    The Icrontic Guy
    30 Aug '09, 4:19 pm

    The backwards compatibility thing IS an issue, Cliff. In a fantasy world where I had unlimited disposable income, I would still not buy the PS3 slim. I would keep my original, clunky, big PS3 because it is one box that plays the 50+ old PS1 and PS2 games that I own.

  32. Gnome Queen
    Ms. D
    30 Aug '09, 4:30 pm

    Yea, the lack of backwards compatibility is pretty ridiculous.

  33. Thrax
    Cad
    30 Aug '09, 4:43 pm

    If were to go out and buy a PS3, I would scour ebay for one of the originals. Backwards compatibility is a big deal.

  34. Cliff_Forster
    Keepin it real
    30 Aug '09, 7:25 pm

    Thats fine, Don't get me wrong I don't think its an undeserieable feature, I'm just saying its not a deal breaker for me. I play games, often finish and sell at the local flea market, or craigslist.

  35. Koreish
    Agent of Chaos
    30 Aug '09, 9:20 pm

    Awww, no one took the bait.

  36. ardichoke
    King Banana Spanner
    30 Aug '09, 9:44 pm
    Quoting Koreish

    Awww, no one took the bait.

    Or perhaps everyone just sees "Wii" and mentally filters it out to the "Kiddy junk" bin in their brains

  37. Koreish
    Agent of Chaos
    30 Aug '09, 9:52 pm

    I was totally hoping Thrax would be Thrax on that statement. Rather he was more interested in being Thrax on Cliff's statement.

  38. Thrax
    Cad
    30 Aug '09, 9:54 pm

    You can't troll a troll. Pfft.

  39. ardichoke
    King Banana Spanner
    30 Aug '09, 9:56 pm

    I beg to differ. I've trolled many a troll in my day. You just can't be so transparent about it.

  40. Koreish
    Agent of Chaos
    30 Aug '09, 10:24 pm

    Despite that though everything I said was true. Just nothing worth playing on the Wii, sounds like Nintendo's getting their act together though. The release line up is starting to get shiny.

  41. Gnome Queen
    Ms. D
    30 Aug '09, 10:37 pm
    Quoting Koreish

    Despite that though everything I said was true. Just nothing worth playing on the Wii, sounds like Nintendo's getting their act together though. The release line up is starting to get shiny.

    Shshhshh Koreish, the adults are talking.

  42. Koreish
    Agent of Chaos
    30 Aug '09, 10:39 pm

    Baby Koreish wants bottle.

  43. kryyst
    CTRL+ALT+DEL
    31 Aug '09, 9:21 am

    There are Xbox owners and there are PS owners, sony's price drop will not elude xbox owners to switch over. The price drop will help sway people that want blue ray that currently haven't bought into it. Not that Sony cares why they are being purchased but a lot of PS3 sales will stem from the fact that a Decent Blueray player is $200 so why not pony up for a PS3. People purchasing systems for that reason game sales become secondary. What that does mean though is that a rise in PS3 sales will not necessarily mean an equal increase in game sales which is where their main money comes from. It's possible, in a weird twisted way that Sony could be hurt more by lower sales since they lose money on each unit if the game sales don't increase in proportion. How twisted is that.

  44. Cliff_Forster
    Keepin it real
    31 Aug '09, 11:20 am
    Quoting kryyst

    There are Xbox owners and there are PS owners, sony's price drop will not elude xbox owners to switch over. The price drop will help sway people that want blue ray that currently haven't bought into it. Not that Sony cares why they are being purchased but a lot of PS3 sales will stem from the fact that a Decent Blueray player is $200 so why not pony up for a PS3. People purchasing systems for that reason game sales become secondary. What that does mean though is that a rise in PS3 sales will not necessarily mean an equal increase in game sales which is where their main money comes from. It's possible, in a weird twisted way that Sony could be hurt more by lower sales since they lose money on each unit if the game sales don't increase in proportion. How twisted is that.

    kryyst,

    So timely, the PS3 is employing a similar buisness model as razor blades, http://life.icrontic.com/articles/cl...paign=homepage

    This buisness model is facinating and more common than we may even realize, its called a "loss leader". King Gillette more or less invented the concept when he and a few engineers set out to market the original safety razor. The US military during WWI had to mandate that soldiers be clean shaven for a few practical reasons. Lice were rampant in the trenches, having your beared pulled during a hand to hand exchange is unpleasant, and mostly because you needed a skin tight seal around your gas mask in case the Germans felt like pulling out the mustard gas on that particular day. A clean shave was actually a matter of battlefield safety. So what does King Gillette do, like a good patriot he sells 3.5 million safety razors at a substantial loss to the -armed forces knowing that given time he will re coup the loss many times over in eventual blade sales. Years later they do similar things. I remember when I turned 18 I got a Sensor Excel and a couple of cartridges for free by mail. My son who turned 18 not too long ago go something similar (a fusion I believe).

    A similar product, Ink Jet printers, look how cheap ink jet printers are these days. Having trouble with one, heck with it, go to your local Wal Mart pick up a Cannon multi function model brand spanking new for $75, throw the old one out. But then you eventually buy ink, and that stuff is ultra high margin. The loss up front is designed to create eventual demand for your high margin item.

    Free software is another place. Google gives you Picasa free of charge, and its a good application for organizing your photos, people used to happily pay about $50 for it before Google purchased it and started giving it away. Why, because there is an in house store to service all your photo printing and gift giving needs. Want a picture of the kids on a coffee mug for your mothers day gift, they got ya covered. Apple's Itunes spent the first year or two of their buisness nearly giving away the farm in hopes of getting a loyal long term user base, they gave away millions of songs at a substantial loss to the music industry with a Pepsi promotion, all in hopes of converting that initial freeloader into a lifelong customer, and it seems to have worked.

    Now onto Sony. Many reports have Sony loosing at least $250 per unit on the PS3 slim. Sony has two primary missions with this, first they obviously want you to buy games, and games do sell at extraordinarily high margins despite the whining that many developers do about the rise in production costs. $59.99 for a new game is kind of absurd, but its necessary when your digging out of the initial hole on hardware. Second, and this is a big one for Sony, Blu-ray adoption. Sony did not spend millions upon millions of dollars in marketing and movie industry incentives to crush the HD-DVD consortium just to have Blu-ray fail. It's all about technology and licensing. For Sony if does not matter if they produced the film or not, or if they developed the player or not, will get a cut of every blu-ray related purchase for years to come. This kind of technology licensing can literally carry a buisness for years if the licensed technology has a widespread enough adoption rate. JVC gained allot of clout in the buisness overnight when VHS vanquished betamax. I believe old patent and licensing deals finally ended for Sony and Phillips for the creation of the compact disk (they both did very well there).

    Many folks pointed to the PS2 as the device that got DVD into allot of consumers homes. To be honest, the PS2 was my entry into the DVD market, and once I saw it, I quickly got rid of my VHS equipment and never looked back. Now DVD was a rare instance where it seemed like the entire industry backed it. It was a great opportunity to expand on peoples desire for home theater, not just the DVD player, but other electornics, speakers, amps, giant TV sets, all benefited from the widespread adoption of DVD so everyone made plenty of cash, in some part the PS2 helped that come along. With Blu-ray Sony got a competitive jump on the competing HD-DVD consortium when they got buy in from the major motion picture company's, so licensing fee's are in the bag for as long as the technology is widely adopted, thus, they will sell you that PS3 at a loss in hopes of a long flowing revenue stream.

    It's risky, and I'm with you on this one, I think broadband, down-loadable HD, home media servers, they are not too far away from becoming more obtainable and once people can just dial up the movie they want from anywhere in their home without the physical media to fuss with that will become the tech of choice. I'm sure Sony is keen to that reality, but if its ten years away instead of two, perhaps Sony can still pull off a nice profit with Blu-ray. Either way, Sony has invested far too much on it to just give up on it, so if selling the PS3 at a loss gets it into more homes that is the short term pill they will swallow in hopes that it eventually displaces DVD. I'd say they have their work cut out for them, but the recent move is going to help it along.

  45. kryyst
    CTRL+ALT+DEL
    31 Aug '09, 12:06 pm

    The same sales loss exists for xbox360, though I seem to recall the per unit loss being much lower then that. However MS has some advantages. First they make a killing off of xbox live subscriptions. They also are more likely to make money off of game sales since people are buying an xbox360 for playing games, since it's not really of any primary use for other services. So while the same tactics of selling a console at a lost to make up later exists between Sony and MS. MS has a more direct means of recouping those costs.

    Sony loses more per console and the recent sales are often as a Blue-Ray player primarily. This means they take longer to recoup costs based on a much smaller and less direct trail of movie purchases. If you figure their stand alone blue ray player costs about $200. They are basically throwing away the PS3.

  46. Snarkasm
    The Photographer.
    31 Aug '09, 12:43 pm

    How in the world did this thread generate these responses?

  47. ardichoke
    King Banana Spanner
    31 Aug '09, 12:58 pm

    Because all you have to do is mention the word console and people will start arguing about which is better, PS3 or XBox360.

  48. Snarkasm
    The Photographer.
    31 Aug '09, 1:07 pm

    I was referring more to the loss-leader fellows up there, heh.

  49. MAGIC
    NFNF
    31 Aug '09, 1:20 pm

    Console gaming sucks.

  50. Cliff_Forster
    Keepin it real
    31 Aug '09, 1:27 pm

    kryyst,

    Keep in mind the 360 lost a metric ton of cash on warranty costs, an added hole to dig from the original loss leader plan. Live revenue, micro transactions all help, but I wonder if the warranty fiasco has done enough damage to that platform so it will never turn a profit.

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