Microsoft Drops Xbox 360 Prices in U.S.

Taking aim at both Nintendo and Sony, Microsoft has dropped the price of the Xbox 360 Arcade to $199, cutting $50 off prices for mid- and high-end consoles.

Microsoft is already ratcheting up competition with Sony and Nintendo for the end-of-year holiday buying season, announcing that it is dropping prices across the board on its Xbox 360 video game consoles…and making the price of its entry level unit even lower than the Nintendo Wii. As of September 5, the price of the hard drive-free Xbox 360 Arcade will drop to $199.99, while the prices of the Xbox 360 Pro and Xbox 360 Elite will drop $50 each to $299.99 and $399.99, respectively.

“We are thrilled to be the first next-generation console on the market to reach $199, a price that invites everyone to enjoy Xbox 360,” said Microsoft’s VP of interactive entertainment Don Mattrick, in a statement. “The majority of consumers make the decision to buy consoles once the price falls to this mark, making this an important milestone for consumers and the industry.”

According to Microsoft, “history” shows that over 75 percent of all console sales happen after a system’s price drops below $200. Nintendo is still pricing the Wii at $249, while Sony’s latest 80 GB edition of its Blu-ray-equipped PlayStation 3 sells for $399. The price cuts follow a similar set of reductions in Japan; recent sales figures have shown Sony’s PS3 outselling the Xbox 360 in the United States.

To date, the Xbox 360 has sold about 20 million consoles worldwide, compared to roughly 14.5 million PlayStation 3s and almost 30 million Nintendo Wii systems. However, the Xbox 360 has been on the market a year longer than either of those competing systems.