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June 8, 2007

Analyst expects Xbox 360 price cut

Posted by Benjamin J. Romano at 9:17 AM

Bloomberg reported this morning that one of the top financial analysts covering Microsoft, Heather Bellini at UBS, expects the company to lower prices on its Xbox 360 game console heading into the holiday shopping season.

Here are the goods from Bloomberg:

"If they really are going to have a good Christmas games lineup, then they just have to have the largest number of boxes out there so that they sell the largest number of games," said Bellini, Institutional Investor's top-ranked software analyst. She expects a price cut as early as September.

Nintendo's Wii, which was the subject of yet another success story in the New York Times today, is pulling ahead in this round of console wars with a mass appeal and a $250 price point that's $50 less than the cheapest Xbox 360, and half as much as the cheapest Sony Play Station 3.

(In another sign of Sony's console business struggles, the company announced job cuts in its U.S. video game unit, following layoffs in Europe in April. See coverage by The Associated Press.)

The Bloomberg story has the usual "no comment" on price cut timing from Microsoft. It does quote an Xbox product manager saying that the company is "well aware that the sweet spot of the market is really 199 bucks." Xbox boss Peter Moore also chimes in, acknowledging that Microsoft needs to pursue a broader market -- much the way Nintendo has by making its console appealing to audiences beyond the hard-core gamers.

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