Today we received a press release from Xbox Canada about a new price drop and I have to wonder if they’re doing the right thing. My problem is not that they want to drop the price of the Elite, but that they may not be dropping it enough; and to make things more confusing the Arcade version of the system is increasing in price. The release says that, “the price of an Xbox 360 Elite console will drop by $70 to $329 CDN. On top of that, the Xbox 360 Pro console will now be priced at $279 CDN, reflecting a price reduction of $20 while supplies last. In addition, for $229 CDN you can get into the game with the purchase of the Xbox 360 Arcade console.”

Now I will fully admit to the fact that I have never had the chance to run a video game corporation, so take this all with a grain of salt, but as a gamer I have to wonder when someone in the gaming industry will learn from the mistakes of the past.

We can go back further if you want, but I think my point can be proven by starting my example in the 3rd console generation with the NES. After the North American video game industry crashed in 1983, Nintendo put the NES onto the market and pretty much dominated the industry over night. They held that dominance until the 5th generation when Nintendo refused to follow the rest of the industry as companies switched from the old cartridges to using the newer compact discs. By the start of the 6th generation most 3rd party developers had flocked to Sony’s side because those discs could hold more information and were far cheaper to produce. During the 6th generation Nintendo finally released a console that used compact discs, the GameCube, but by that point they had lost most of their 3rd party support to the well entrenched Sony corporation. As of today the Playstation 2 had sold over 140 million consoles, it can still be found in big box stores today, and Sony promised around 100 new games will be released for it in roughly the next year or so. The GameCube was only able to sell 22 million units during its lifespan, and support for it was pulled a few years ago.

Sony had dominance over the industry for almost a decade. Then the 7th (and current) generation of consoles were released. Microsoft started it off by releasing a powerful, somewhat fragile, and relatively cheaper Xbox360. A few years later Nintendo would release the Wii. It received no respect from the hardcore gaming crowd, but found its place by completely capturing the casual gaming market. However, when it was Sony’s chance to launch the PlayStation 3, they refused to follow the rest of the industry. Sony released their black monoliths at a price between $500 and $600 and said, “(that they want) consumers to think to themselves ‘I will work more hours to buy one’. We want people to feel that they want it, irrespective of anything else“; so consumers collectively did their best Rorschach impressions and whispered back “no.” Thus, Sony has lost its dominance over the industry in recent years.

In the present, the Wii has put up a good fight, but recently I would say that the 360 is winning this generation of the console war. But how will Microsoft do in the future now that they refuse to follow the rest of the industry? While the competition of previous generations were decided by compact discs and 3rd party developers, it looks like this generation may be decided by price. Which makes their choice of adding Wi-Fi and selling the Elite for $329 a strange one to me. I know that $30 is not a huge amount of money, but being the cheapest will automatically earn you serious consideration in any situation; and that consideration could cost Microsoft more than a few sales.

And speaking of being cheapest, the cheapest Xbox360 on the market (the Xbox360 Arcade) is getting an increased price tag. A console that you can still find in places like Future Shop and EB Games for $200 is now going to cost $229 CDN . Now there was nothing in the press release we got, but by doing a little research I can say that it looks like the main difference between the old $200 version and the new expensive one is that the $229 version of the Xbox360 Arcade will come with HDMI outputs for HD gaming, a wireless controller will replace the old wired one that use to come with the system, and the system will now have 512 MB of memory instead of the 256 MB that the older $200 version had.

In the end, the players of the console wars have finally made their moves. Sony thinks the console war can be won with a price cut. Microsoft is betting on the Wireless Networks across the country. Which choice is better? Only time can truly answer that question, but as we wait we do have a few things to ponder. The first is that Microsoft has managed to beat Sony in sales for the past 3 years without bundling a Wi-Fi adapters to their system; also, until now Wi-Fi was never been more than a footnote in Sony’s promotional material (instead they focused on improving their library and the capabilities of Blue-Ray players).

So is this the best future for the 360? Or has Microsoft come so close only to land so far away from their goal of winning this generation of the console wars?

This entry was posted on Friday, August 28th, 2009 at 4:01 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.