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RUMOR #1: Microsoft will drop the Xbox price to $99 by Labor Day and will have the Xbox 2 ready by 2005.
Source: The latest Game Over column from CNN/Money games reporter Chris Morris.
The official story: Microsoft did not respond to e-mails or voice mails. Shocker.
What we heard: When Morris, one of the most game-savvy reporters in the mainstream media, wrote the speculative headline "Xbox for $99? Xbox 2 in 2005?" he probably knew some gamers would take it as gospel. (Those are question marks, people!) But thousands of subsequent forum posts have treated the price point--which comes from a single analyst--as all but official. But anyone who actually read the article knows that such a deep cut is far from a done deal. Microsoft already loses money on every $179 Xbox sold--dropping another $80 "would result in a flood of red ink," according to Morris. However, Morris astutely points out that Microsoft cares more about expanding its brand than filling its already overflowing coffers, so such a drastic measure isn't totally out of the question. He's a lot more skeptical about the Xbox 2 launching in 2005, a year before the PS3 is expected. "Showing your hand a year before the industry's 500 lb. gorilla does carries a significant amount of risk," says Morris. "Just ask Sega."
Bogus or not bogus?: Semi-bogus. The consensus among game-industry insiders is there will be an Xbox price-cut this year. The only question is how big it will be.
Hmm, first the Gamecube and now possibly the Xbox. This is very exciting for those of us wanting a piece of every console but not being able to afford all at their recent prices. Cant wait to see if this turns out true.
This is good news, no, great news, if it turns out to be true.
This would be amazing, actually. Because, I had been hoping for months for the Xbox to come remarkably down in price, as to this level. Hmm, and if it finally does, I might find myself buying an Xbox and a Gamecube sometime this year, this is really weird, no doubt.
But really, I think it'd be a big confidence booster for Sony if Microsoft release their console first, because then they'll have a lot longer to make it a more superior console, graphics wise, and I'm sure Sony would have an even huger edge gameplay wise.
Or, Sony could approach it from the other angle, frantic to rush the PS3, because they fear gamers will become hooked on the Xbox 2, and totally forget about the PS3, it could be a very interesting turn of events, if either of those situations happen.
Thanks for the news.
Keep this in mind though
Microsoft already loses money on every $179 Xbox sold--dropping another $80 "would result in a flood of red ink,"
Like MS gives a crap but there comes a point when you have to say enough is enough. Erm...losing money that is.
But when you think about it, it's Microsoft's fault that they don't make as much money as they probably should for the Xbox, they hyped, and they hyped some more, and look how it turned out, it almost flopped, it's just those Microsoft junkies kept it alive.
So I'm glad they're losing money, it'll make them push a little harder next time, slack jawed hicks Bill Gates is.
If it does come down some in price, I'll probably be the first to leap onto it though, if it's one thing I love it's a desperate Microsoft, but I like dirt-cheap gaming consoles, too.
Im not so sure.
M$ can afford losing money now, if it means huge profit in the coming years. If they were to drop it to $99 there would be a whole surge of people rushing out and buying it. It would develop their fanbase loads (the thing that gives Sony such a huge edge).
Lose money or break even now with the xbox and earn hundreds of millions in a couple years time with the Xbox 2. It sounds like a viable route for them to take to me.
Well it really comes down to how much will they loose if they reduce the price to $99?
:idea: Xbox has sold roughly sales at 13.7 million units so far....
:idea: Xbox costs $300 to manufacture (taking into account economies of scale). Industry experts back in 2001 claimed that it would originally cost up to $450 per unit to produce, so I think $300 is fairly reasonable. It could be less, but for the sake of argument letís say itís accurate.
:idea: I would estimate that Xbox will sell some where in the region of 20 - 40 million units before the Xbox2 comes out.
If MS make the unit cost $99 for the next year of so (based on Xbox2 coming out in 2005 like the rumour said) and sell a further 20 million units
That equates to:
$99 * 20 000 000 = $ 1 980 000 000
$300 * 20 000 000 = $ 6 000 000 000
Thatís a 4.12 billion loss....... :shock:
I know that's not taking into account MS's other profit making schemes under the MS entertainment division but this is just showing roughly how much MS would loose in harware sales from making the Xbox $99 for one year.
I think Microsoft can afford to loose that. Assuming my sums make sense. :wink:
Let's not forget how stubborn M$ is though, however I think they're smarter than that to go lowering the price so dramastically when they know they're losing money as it is.
Rebonuk makes a point however, about establilishing a large fanbase...but still even for M$ and Sony 4 billion dollars is a massive hit to the ol' wallet.
I heard somewhere around 500 dollars for the manufacturing cost of an Xbox but 400-450 also sounds resonable.
Yea I'm sure they make lot's of money from games sales too, so that would even out the loss, and in the long term Xbox2 sales would bring them back into profit etc, assuming there making a loss now, which is possible.
I had to think about that one for a moment then I realized it made sense. You only buy one X-box but tons of games, however manufacturing prices of games also add up.
Indeed, the nigh sky high high prices of the xbox have left me in the floor like a rag doll. If they do lower the price to 99$, i don't think gates would mind. heck, 1-2 years ago, his empire was in the tens of billions. dropping 80$ wont even scratch the enterprise.
Going on to another subject, no one buy the Gamecube, i repeat, no one buy gamecube. it is terrible (in my opinion) my cousins (who are 15 and 17) years old, told me that the gamecube was better that both the xbox and the PS2. of course, i was young and stupid, and gullible, so i believed them. THey had recruited another minion into the rapidly growing ranks of the 4th Reich (no insult meant) that was Nintendo Gamecube. Now, I'm stuck with the worst, most childish console in the history of mankind.
THe morale of the story is never to trust Nintendo (unless they unfold a more mature console)
Lol. I agree it is rather childish, I think Xbox is a bit too. PlayStation has always been about the older end of the market. However I'm not sure whether I believe that the majority of PlayStation gamers are 20-35. I think a huge amount of them are under 18.
Games console companies make money from each game sold through licensing deals. The costs of the games production lies solely on the producer, as far as I'm aware.
If they do lower the price to 99$, i don't think gates would mind. heck, 1-2 years ago, his empire was in the tens of billions. dropping 80$ wont even scratch the enterprise.
What alot of people seem to forget is Sony as an overall company accounts for vast amount more than Microsoft.
no one buy the Gamecube, i repeat, no one buy gamecube. it is terrible (in my opinion) my cousins (who are 15 and 17) years old, told me that the gamecube was better that both the xbox and the PS2. of course, i was young and stupid, and gullible, so i believed them.
I quite enjoy my Gamecube, ofcourse I just got it. Im looking to buy Metroid Prime, Resident Evil: Zero, and Metal Gear Solid: Twin Snakes when it arrives. Now those arent really to childish but yea the majority of the games are a bit towards the younger market. I wouldnt say it's better than the Xbox and PS2 though, good....but not better.
Where is the controller?
By War Hawk
Sony showcased the PS3 hardware in a glass case at this year Consumer Electronic Show.
The PS3 console has not changed since it was introduce at E3 2005, at least for now. However, it is expected that the controller will go under serious and major revisions and possible major changes. It was not displayed at the CES, which raises the question; will it change the boomerang design?
The controller was very hard critisize in the gaming community. The boomerang design gives the sensation itís uncomfortable, although not many people had the opportunity to hold it. Sony does have a good reputation when its time to listen to the fans, is this the reason for the redesign?
We will have to wait and see what Sony does with the controller design. The next generation controller have to live up to the expectations, and its predecessor the Dual Shock 2.
Srry WarHawk....its been posted and it live on the website...
Great article - shame it was picked up earlier today! Good writing style War Hawk!
God!!! im a no luck week. Well it was good anyways, this push me to work harder, 8)
yeah...I am srry about that. I just started school so I wont be on as much as I am now....lol.....Same with NoUse4aname.....there will be plenty of new stories to write about in the future. We got therest of CES, Playstation Confrence, and E3 2006 to look forward to.....not tomention the launch of the PS3.
Its alright Nousmercenary, your dedication makes me work double hard and trying to keep up with your quality. Yeah school takes all your time lol. :(
Don't worry guys, theres enough news to go around. And there certainly will be even more come E3 and launch!