New bundles and an Xbox 360 price drop may make for a very Microsoft Christmas

How will the Xbox 360 compete with Nintendo’s Wii U for attention this fall? Not with a line up of blockbuster exclusives, and but with a price drop.

The Xbox 360 is quietly enjoying its retail dotage. November will mark the system’s seventh year on shelves, making it positively ancient by video game technology standards. It’s getting just two major exclusive release this fall in Forza Horizon, which will appeal primarily to a niche audience, and Halo 4, a game that isn’t attended by the manic hype that surrounded its predecessor in 2007. Microsoft is opening new services associated with the box, like Xbox Music, and laying the groundwork for the brand’s future with Windows 8, but the Xbox 360 is largely staying quiet going into the always-competitive holidays.

The Xbox 360 is getting a price drop this holiday though. Microsoft isn’t announcing a line wide price drop for all Xbox 360 packages, but its retail partners are. Best Buy, Kmart, GameStop, Amazon, and Target are all selling brand new Xbox 360 bundles that are $50 cheaper than usual. GameStop, for example, is selling a $250 box that comes with a 250GB Xbox 360, a copy of Forza Motorsport 4, and a download voucher for The Elder Scrolls V: Skyrim, alongside another $250 package with a 4GB Xbox 360 and a Kinect. Other retailers are offering similar packages at the same price.

Microsoft is making a number of silent statements with this price drop. The first is that this holiday will be one of the last for the Xbox 360 as Microsoft’s marquee piece of consumer entertainment technology. The $250 price point doesn’t bring the Xbox 360 into the impulse buy, budget region of $199, a price that Microsoft will likely drop to at the beginning of the next fiscal year. That timing may pave the way for Microsoft to release its next console, the Xbox 720 or Durango as it may be called, to control the next fall.

The other statement: We are taking advantage of Sony’s weakness. These are console bundles with significant value to consumers (two games, both of which are recognizable best-sellers from the past few seasons), and they are priced just below Sony’s confusingly priced new PlayStation 3 bundles, which start at $270. Sony also doesn’t have a Halo 4 to move its machine, and the next major PS3 exclusive, God of War: Ascension, won’t be released until March 12.

With this price cut, Microsoft has casually put itself in the best position in the US market for Christmas, and will put its its seasoned console head-to-head with Nintendo’s newest offering. An impressive close to seven years.

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