Xbox 360 price cuts coming before Christmas?

Microsoft (MSFT) realizes that $199 is the “sweet spot” for console pricing, and that Nintendo did a “good job” pricing the Wii at $249, Bloomberg reports, quoting David Hufford, a director of Xbox product management. The Bloomberg piece also says:

Microsoft Corp. has won over 20-year-old gamers, who spend hours a day launching rockets and firing

plasma guns on the company’s Xbox 360. Now it wants their moms.

To lure them, the world’s largest software maker says it plans to add more family games and redo retail displays to make the children’s titles easier to find. It also may cut the Xbox price, which is as high as $399, analysts say.

Microsoft is emulating rival Nintendo Co. The Japanese company’s Wii console outsells the Xbox 360 in the U.S. by appealing to women, children and the elderly, a strategy Microsoft says it needs to adopt to win a broader audience than the first Xbox attracted.

It’s worth noting that Sony (SNE) would be unlikely to match such a price cut with its PlayStation 3, because the PS3 contains an expensive Blu-ray drive for playing high-definition content.

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