For the past weeks, there were talks that Microsoft is going to take advantage of the holiday season to offset the launch of the PS3 from Sony. It was speculated that there would be Xbox 360 price slash. As a result, most gamers waited for the price slash and the PS3’s release before deciding which console to get. However, to the disappointment of everyone, John Porcaro, US Microsoft’s PR guy recently came out with a statement from the MS bigwigs that there would be no price slash for the newest Xbox model.
Quite understandably, since Xbox 360 is already selling at half the value of the new Sony console. The cheaper Nintendo Wii targets a different gaming audience so Microsoft does not consider it as a threat. Also, perhaps, there is some truth in what the UBS analysts predicted last year. According to UBS analysts, Microsoft subsidizes the cost of their new console by $75. This is the reason they are able to sell for a lower price. Some rumors even persist that other than the subsidized $75, Microsoft is losing as much as $100 per console. This is due to Microsoft’s inability to produce their own core manufacturing systems. They get the parts of their...
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