Xbox 360 sales stagnant - are price cuts Microsoft’s only option?
By Dave Parrack
The latest sales figures from the U.S. show that sales of the Xbox 360 are staying in the doldrums, in spite of Microsoft cutting the price of the 20Gb Pro model. There are now rumours of more price cuts across the whole range, but is that going to be enough to lift the fortunes of the Xbox 360? If not, then what else could Microsoft do to reverse the trend?
The cutting of the 20Gb Pro model announced last month was simply to clear stock to make way for the new 60Gb Pro model launching at the same price point. Even so, most industry analysts thought the price cut would increase sales for the month of July, with Pachter and Divnich both predicting wrongly that the Xbox 360 would leapfrog the PS3.
In the end, the Xbox 360 only managed sales of just over 200,000 units. And that’s a problem for Microsoft as despite its claims that the Xbox 360 is doing fine, and that the attach rate is the best in gaming history, console sales are a necessary evil to push game sales and to ensure a future in the games industry.
Wedbush Morgan Securities analyst Michael Pachter reacted to the NPD data by suggesting that the format is stagnant. According to Game Daily, he said:
Xbox 360 hardware sales were again lighter than we expected, indicating that Microsoft may be experiencing stagnant demand. The company cut the price of its Xbox 360 Pro (20GB) by $50 to $299 in July, but demand remained fairly flat. We do not expect a significant bump in August with the release of the new Pro 60GB at $349. We expect Microsoft to reconsider its pricing strategy, especially if sales of the Xbox 360 continue to lag sales of the PS3.
At the beginning of this month, Mike reported on the speculation across the Internet that further price cuts are on the way. If these happen, they would make the basic Arcade pack cheaper than the Nintendo Wii for the first time, and the Elite pack on a par with the PS3. But are further price cuts really going to do the job? And if not, what else can Microsoft do to increase interest in the Xbox 360?
Microsoft seems to have run out of ideas, and although consumers will welcome the price cutting, especially if it forces a pricing war between Microsoft and Sony, that surely can’t be all the company has up its sleeve. What happened to the long-rumoured motion-sensing controller? Or the attempt to gain ground in the casual gaming sector? There just seems to be nothing happening for the Xbox right now.
Microsoft needs to pull something out of the bag or the sales flat line could turn in to a full-scale decline very soon.
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August 17th, 2008
MS should also cut the 60G 360 model too
August 17th, 2008
Microsoft aren’t really pleasing anyone. A price cut is great for new customers, but the 360 is at market saturation. The Ps3 and Wii offer different and exciting options which differ from the 360. With constant price cuts the 360 looks like a cheap product. By cutting the price Microsoft isn’t rewarding old customers. I do feel sorry for 360 owners with these constant price cuts because it seems to me like Microsoft are only interested in making money by suckering in new customers, while older customers wait patiently for few good games (albeit GOW will be good no doubt). Microsoft should start focusing their attention on customer care rather than making a profit.
August 17th, 2008
sigh i wish ms had their own identity. If they made more of their own ips instead of making it their goal to steal other companies ips.
If ms lose this generation i have 0 sympathy and respect for them. Ms should focus more on the future, not just the now.
August 17th, 2008
This blog post fails to address several important issues. yes the month over month console sale are relatively stagnant/constant, but this is for june/july, which is traditionally a very slow time for the industry as a whole. Real growth will occur oct-dec, which makes up nearly half the money spent per year. where MS has seen growth is the japanese market. It continues to make efforts to crack this market by appealing to the demand for a specific type of RPG. With exclusives on the way from sqaureEnix it is shure to make headway even further, both infinite undiscovery and FF13 look to be big draws for the system, the later being multiplatform. Lowering the price of the 360 below the $200 threshhold is a wise move for the holiday season and will surely pay dividends. Through holiday 09 the xbox will continue to have the strongest library of games, and at a price point less than the wii, the money conscious consumer is bound to take notice. “Winning” a console war does not come down to units sold, but %revenue, stategic long term vision, and stock appreciation. on these fronts it will be interesting to see how all companies fare.
August 17th, 2008
Both of you dont own a 360 so your opinions are tainted with fanboyism. So what are these different and exciting options you speak of? The last time I looked the game industry was ONE industry all playing the same game picking our pockets by reworking the same old crap. The big 3 play with this and that but in the end its nothing but a computer. I feel sorry for you for thinking that BOX is something its not. I feel sorry for you for thinking people with different tastes are less than you. Strange that a good and necessary price cut is seen as weekness when its good for all…You Sony folks are starting to act like Apple fans… lost in space.
August 17th, 2008
I just figured that the many ps2 owners don’t see the reason to upgrade for the same old experiences with prettier graphics
for another $300+, which is why the wii is crushing every other machine. It has word of mouth about the motion controls and its a cheap treat.
Me, I like to give money to the big players! What else would I spend it on?
I’m also a sucker for playing the same games with prettier graphics
August 17th, 2008
What are those exciting things you speak of? Well mabey for the Ps3 blu-ray and for the wii there controller kinda makes the 360 seem well kinda old. Its not all about FPS to everyone and the broad apeal goes to Sony and nintendo hands down.
August 17th, 2008
Sales are stagnant (for both Xbox & PS3) but not bad considering a slumping economy.
It also needs to be considered that the leaked news of a Xbox price cut (of new improved models nonetheless) less than month away will have an effect of suppressing sales. Cheap refurbish Xboxs, ones that had been warranted out, flooding the market will cripple new sales as well.
August 17th, 2008
Well put lach. But this is blorge, half truths and spin reign supreme here. Probably why more ps3 owners come here than 360 owners. They feel safe when reading biased posts. I come here for a laugh, but it seems that blorge may have blocked my work’s ip from posting. Every time I try I get a message telling me that my post has been blocked by the spam filter. Anyone else having that issue?
August 17th, 2008
Haha, they’re collecting your home IP now
I see my $10 got the job done! (Yes blorge is THAT cheap!)
But erm, no never get told I my post is spam. Sometimes I get the anti-bot string entry tho.
August 17th, 2008
Haha those bastards!
August 17th, 2008
http://arstechnica.com/news.ars/post/20080817-microsoft.html
August 18th, 2008
Kev why did you post an Anti 360 article…no seriously?
August 18th, 2008
That probably wasn’t kev. Someone named ‘lol’ posted the same article in another post.
August 18th, 2008
bourne - it’s not me. prolly another ps3 fanboy posting as me. “market saturation”? dumbest rationale, ever…. especially given the impending holidays. i don’t think you understand that term.
back ot: this article is ridiculous since the price JUST occured and the reflection of those cuts won’t be evident until later.
ps…pachter has been wrong more than right… so why do you still post his ramblings? oh that’s right…because dave p is still on sony’s leg…
August 18th, 2008
Kev - It sure seems like that, as most people are choosing to buy other consoles, especially as the 360’s sales on home turf are being continuously beaten by PS3 month by month (since January!!)
: http://kotaku.com/5038132/julys-npd-sales-now-in-stunning-colour
But then again i suppose Blorge and Kotaku have an anti 360 alliance, therefore these NPD figures cannot be trusted eh?
August 18th, 2008
The Ars article has a LOT right, and any fan of X360 ought to be urging MS to take the sort of steps they outline. While one or two months do not a trend make, still, MS seems to have lost interest in pushing the console. Is it at saturation as hinted at above? No way. There are still a LOT of potential X360 customers out there looking for a bona fide reason to buy one. But right now the less afluent ones (or more “casual”) are buying Wii, and the more affluent ones (or more “hardcore”) are buying PS3.
August 18th, 2008
bourne - do your own research please. the 360 has only lost 4 of the 8 months in NA according to the NPD data i’ve seen. but then again, why use facts right? lol.
August 18th, 2008
bourne - i love this part of the artech article:
“There are large numbers of gamers out there who simply will not pay money for online play and are more than happy with Sony’s offerings. ”
the fact more gamers opt to pay for xbox live than take psn for free, just shot the clowns idea full of holes…
ah..fanboys… where would we be w/o them… LMAO…
August 18th, 2008
Well they say large numbers, not ‘more’
August 18th, 2008
Sorry Kev but Bourne has shown more data than u, maybe instead of criticizing u can provide some links to where u get ur apparent “data” from
August 18th, 2008
Whoa Kev, you assume that every single Xbox and ps3 owner has and uses the consoles for networking and playing online. Even if every owner did do that there would still be more XBL users because there are more people who own the console (i think, this may have changed recently)
August 18th, 2008
Whoa Kev, you assume that every single Xbox and ps3 owner has and uses the consoles for networking and playing online. Even if every owner did do that there would still be more XBL users because there are more people who own the console (i think, this may have changed recently)
Kev - also i’m one of those people who refuse to pay for an online service and i’m very happy with what Sony provides.
August 18th, 2008
Lol kev, nice one. Mr Sparkle, why does Kev need to show you the data he’s talking about? How about you go and find the NPD monthly data yourself? The rest of us know what he’s talking about, try keeping up, yes?
August 18th, 2008
What do u mean “nice one Kev”, he didn’t do anything just criticised Bourne’s data without telling us where he gets his, just what “he’s seen”.
Ok we will all just believe Kev, no questions asked, he’s not biased at all.
August 18th, 2008
Sales tend to slow when there is no major announcements for the product. People tend to buy on “Hype” as well. I know of 3 people who never played Halo, but just the hype alone send them to the stores to buy it. Some of them only played a few hours before shelving the game.
Price cuts are good but Microsoft needs to create that “Halo” fire again with other software titles.
August 18th, 2008
Poor mr sparkle, and you’re not biased at all either? You are one of the most rabid fanboys on this site who takes personal offence when your beloved P$3 is put in a bad light. For a washing detergent, you are very angry.
Also, reread my post, perhaps you didn’t read the bit where I told you to go and look things up yourself? Or did you ignore it and only read what you wanted to read?
August 18th, 2008
Ok Harry, u’ve got me I can’t keep up, i’ve taken a look and can’t find anything other than Kotaku’s , so go ahead tell me where u get ur data from.
August 18th, 2008
I’m not doing your work for you, do it yourself.
August 19th, 2008
Cmon now were all biased for the console we love, theres no denying it. This is a cess pit for fanboys alike, however its less agressive than other sites (game trailers, kotaku) those guys are whacko’s
August 19th, 2008
That’s true Bourne. Most times it’s in good nature or a bit of fun, but sometimes it gets a little nasty in here.
August 19th, 2008
Harry is someone impersonating you like what happened to Kev because your name keep changing albeit slightly… Off topic completely… I found my ps1 controller the other day without analog sticks and it was horrible! Also found the time crisis handgun…may have to boot the old game up and go blast some bad guys for old times sakes.
August 19th, 2008
What “work” Harry?, why I thought u said u already know where to find the NPD data, or do u just listen to whatever Kev tells u?.
August 19th, 2008
Oh and Harry I merely defend the ps3 and my favourite games (I guess the Wii as well for the most part) from people like u, who are always the ones to start an argument (like Kev, Ivan, Sega and CAD, CAD has improved alot and is no where near as bad as u 4). Check my posts I never openly attack any console or game from out of nowhere, that is what a “rabid fanboy” is and that’s y u r one and I’m not.
August 19th, 2008
Kev (and Harry),
Try not to jump the gun on the month-by-month sales issue. A while back I gave Kev some links showing that the PS3 outsold the 360 in both January and February, in relation to information already supplied that showed the PS3 winning both May and June as well. I think Kev assumed that because I didn’t post links for March or April that the PS3 lost those. As far as I remember, the PS3 DID lose at least one of those two months, but I can’t say for sure as alot of the latest information has been claiming that the PS3 has won every month in 2008.
If you’re one of those people saying “Do your own research” then perhaps you should take your own advice.
-Arvis
August 19th, 2008
@ Mr Sparkle….Hee hee hee I see that you’ve come across the 360 demon known as HARRY SACHZ….So far I didn’t see anything derogatory that he mentioned about PS3, so i’m going to keep my mouth shut…….for now
But I’m waaaaatching
hee hee
-Future of Sega
August 28th, 2008
the price is nothing, microsoft already made huge price cuts in UK of $200 dollars with no gain in sales, no price will save the xbox 360, its doomed.
the console is the important thing, if the price was the main factor, the $99 game cube would be the winner the last generation, if high prices were important, not a sinlge person would buy the ps3 at $500, or buy ferraris, mercedes, etc
quality and value, the ps3 and the wii have it, the xbox not.