After weeks of dancing around the question of whether it would cut prices, Microsoft (MSFT) has trimmed the most affordable Xbox 360’s price by $20 to $280, the mid-range version $50 to $350, and the most expensive $30 to $450. The move leaves Microsoft’s cheapest console $30 more expensive than Nintendo’s Wii, but more than $200 cheaper than Sony’s (SNE) PlayStation 3.
The move seems calculated to improve Microsoft’s position heading into the second half of the year, when console and game sales are heaviest. Some game industry analysts are saying that after the Xbox 360’s weak showing so far this year, Microsoft will need a strong holiday season to avoid a last-place showing in this round of the console wars.
This wasn’t how most people thought the gaming market would look a couple of years ago. As the gaming heavyweights were preparing to release this generation of consoles, it looked like a two-horse race between incumbent champion Sony and able challenger Microsoft. Microsoft, which brought the feel of PC gaming to consoles, sparked a beefcake competition with Sony over which company could deliver the most musclebound, graphics-crunching game box. Forgotten in the testosterone-fueled row was Nintendo, the graphics-challenged contender that seemed to underscore its wimpyness by naming its console the Wii.
Fast-forward to now, and no one’s laughing at Nintendo anymore. The straightforward, affordable Wii is the darling of the gaming industry, thanks to its intuitive, motion-sensitive controller and its beginner-friendly games.
Nintendo appears poised to have another strong holiday season with the Wii. To quote a DFC Intelligence report: