Microsoft Slashes Price Of Xbox 360 - Update

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Aiming to keep up with the competition in the video gaming field, software giant Microsoft Corp. (MSFT) Thursday announced that the price of an Xbox 360 Elite console will drop by $100 beginning Friday, August 28, and it is now priced at just $299.99 estimated retail price, or ERP, in the United States. Further, the company reduced the price of Xbox 360 Pro console by $50, which will now be priced at $249.99 ERP.

Last week, consumer electronics giant Sony Corp. (SNE) reduced the price of its video-game console PlayStation 3 or PS3 by about 25% or $100 to $299.

According to Microsoft, its premier video game and entertainment system Xbox 360, with Xbox 360 Arcade console available at just $199.99 ERP, puts all entertainment in one place, allowing to play games, watch movies and TV shows, and listen to music. The company said, as announced earlier, that Xbox 360 sold today and tomorrow will work with code-named 'Project Natal' and controller-free gaming in the future.

The company added that Xbox LIVE, its online gaming and entertainment network with an active community of more than 20 million people across 26 countries, will soon introduce a whole new era of social entertainment in the living room. Starting this fall, customers could interact with friends on Facebook and share photos and real-time status updates right from their television, or stay connected to Twitter by reading, posting and replying to Tweets.

Shane Kim, corporate vice president of strategy and business development for the Interactive Entertainment Business at Microsoft, said, "With the holiday season right around the corner, it's already time to start looking for entertainment and gifts that everyone will enjoy. If you're looking for deep experiences that don't require deep pockets, now is the time to purchase an Xbox 360. We've got the best games, a vast library of TV shows and movies, new music experiences, more ways to connect friends and family, and so much more on the horizon including 'Project Natal' -- no controller required."

Among other video-game console makers, Sony in mid-August reduced the price of its video-game console PlayStation 3 or PS3 by about 25% or $100 to $299, effective last Tuesday. The company also unveiled a slimmer version of the PS3, having a 120GB Hard Disk Drive or HDD, which will be available from September 1 for the same price. Further, Sony said the price of PS3 with 160GB HDD would be reduced to $399 from August 18 in North America. The company has been under pressure to cut prices of consoles for the past few months, after sales showed declines in an uncertain economy that is encouraging budget and discretionary spending habits.

Another peer, Nintendo Co. hasn't reduced the price of the Wii, which is the market leader among the latest generation of video game consoles in the U.S., as per reports. The product's price has remained at $250 since late 2006. Meanwhile, the Wall Street Journal reported that the company may be forced to reduce the price to meet its year-end sales targets as demand for the device has slowed considerably so far in 2009.

According to market research company NPD Group, industry sales for hardware and software in the U.S. in July were down 29% from the same month a year ago. NPD reportedly said that about 203,000 Xbox 360 players were sold in July, compared to about 122,000 PlayStation 3 consoles and over 252,000 Wii consoles from Nintendo.

Recently, in trying to gain a greater share of the digital media player market, Microsoft on August 14 made its new Zune HD digital music and video player available for pre-order on Thursday, aggressively pricing it lower than similar products such as Apple's iPod Touch. The Zune, which will officially be released on September 15, with a price tag of $219.99 for a 16-gigabyte edition and $289.99 for a 32-gigabyte edition. Sixteen- and 32-gigabyte iPod Touches are priced at $299 and $399, respectively.

MSFT closed Wednesday's regular trading session at $24.55, down $0.09, on a volume of 41 million shares.

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