Xbox to Undercut Wii, Analyst Says

by Ken Schachter on 05 August 2008, 12:06

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Topics: xbox , nintendo , ubs , PlayStation 3 , PS3 , Benjamin Schachter , wii , Ken Schachter

 
Microsoft plans price cuts for its Xbox line that will bring the tab for its low-end console below that of Nintendo’s popular Wii, an analyst forecast Tuesday.

In a research note, UBS analyst Benjamin Schachter (no relation to the reporter) said that he expects Microsoft to cut the price of its low-end Xbox Arcade to $199. That would position the box below the price of the $250 Wii for the first time.

The price of the Xbox Pro, meanwhile, would fall to $299, while the Elite model, with a 120 GB hard drive, would sink to $399, “comparable” to Sony’s new $399 price point for its PlayStation 3.

Circuit City lists the Xbox 360 Elite at $449, the 60 GB Pro at $349 and the Arcade at $279.

Mr. Schachter said Microsoft hopes to use the price cuts to blunt the impact of major upcoming PS3 software releases, including LittleBigPlanet and Resistance 2. The analyst said that Sony is unlikely to return fire with its own price cut, though “Sony might have to reassess” if PS3 sales slump.

Citing figures from researcher NPD, Mr. Schachter said Xbox prices spiked by about 35 percent after Microsoft cut Xbox prices in August 2007.