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August 7, 2007

Why Microsoft didn't acknowledge Xbox 360 price leaks

Posted by Benjamin J. Romano at 10:21 AM

"What a surprise," Billy Pidgeon, the veteran video games analyst at IDC, said sarcastically when asked about the Xbox 360 price cut Microsoft announced last night.

Really there was no surprise. Everyone saw this coming. Not because of Sony's price cut -- which turns out to be not much of a price cut at all, once the $500 60-gigabyte PlayStation 3s sell out and all that's left is the $600 80-gigabyte version. In fact, another analyst, Van Baker with Gartner, said he didn't see any serious pressure from the marketplace for the Xbox price cut. (He also doesn't see Microsoft competing with Nintendo for the same set of customers, something other analysts and executives might disagree with.)

No, the reason everyone saw it coming was because, well, we saw it.

"There are people at certain big box retailers that like to leak fliers," said Pidgeon, referring to the scanned copies of print advertisements from Circuit City and Toys R Us, which appeared at game-enthusiast sites such as Joystiq last month, showing the exact price cuts Microsoft just announced.

I asked Xbox 360 group product manager Aaron Greenberg why, when there was this obvious evidence the cuts were coming, executives decided to stay mum and make the announcement on their own terms. Here's what he said:

It's interesting, we've had some internal debate here about like how many people really read some of those blogs. I mean while there's been some fuzzy, camera-phone photos like, we haven't seen any mainstream media covering it. I think it's still been pretty much in the speculative space and you know, for us, we know there's always a risk that when you're timing with prices like this and you want to have real, serious integration with retail -- every major retailer is doing a big Sunday ad -- these things are always at risk and we wouldn't trade the risk of those leaks for not having the retail tie-back, so we felt like we made the right bet there. But still we also don't want to just take the leaked news and feel like we have to confirm stuff when certain details are there; some of it's right and some it's wrong. We want to be able to, as we planned, announce it when we're ready to.

Another little detail that came out of Monday's announcement: the limited edition "Halo 3" version of the Xbox 360, priced at $400, and decked out in green and gold, and, Greenberg said, it will have the same HDMI (high-definition multimedia Interface) connection as the "elite" version, which goes on sale tomorrow for $450. The upside of an HDMI connection is that it is a single cable that carries both HD video and audio signals.

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Tricia Duryee
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