Why Xbox 360 Needs A Price Drop

The heavily-speculated price drop for the Xbox 360 during the launch of Grand Theft Auto IV has come and gone and Microsoft’s video game system is still priced at the same amount as before. That doesn’t mean that the Xbox 360 is badly in need of one, however. Here are top five reasons why Microsoft should drop the price of the Xbox 360.

1.Microsoft is Rich

This is pretty obvious to anyone not living under a rock. Microsoft is rich enough to absorb a price drop for the Xbox 360. Bill Gated himself is one the richest people in the world and is capable of buying entire countries. Not to mention that pretty much every other videogame companies except for Microsoft would have went home after the colossal financial failure of the original Xbox. If Microsoft can buy Yahoo, they can definitely afford to drop the price of the Xbox 360.

2.  Other Revenue Streams

Hardware sales aren’t the only source of revenue for the Xbox 360. Microsoft gets paid every time an Xbox 360 game is sold and the Xbox 360 is current setting sales records in that department. In addition, they get $50 a year per user for their Xbox LIVE subscription service. Finally, money is made from the accessories, from the controller to the hard drive. While they won’t earn nearly as much with a price drop (they may even lose some), other revenue streams will make up for it.

3.Too Many Different SKUs

The Xbox 360 launched with two different units with the Core and the Premium. The number eventually expanded to four. Normally, it wouldn’t be a problem but the Core is lacking a hard drive, which hinders the overall experience of the Xbox 360. The different pricing and units will only confuse the average consumer. Since the acceptable standard units cost at least $349.99, a price drop will ease the pressure for the consumers when choosing a specific unit for the Xbox 360.

4.Red Ring of Death

The Xbox 360 is known for its faulty hardware. The most famous of which is the “Red Ring of Death,” which results from overheating. This stigma has made potential consumers hesitant on purchasing the system. While Microsoft has made strides, a price drop will go a long way into re-earning the trust of consumer. Faulty hardware is a lot easier to swallow if the hardware is cheaper.


Competition is good for consumers as it often results in price wars. The Xbox 360 has been second fiddle to the Nintendo Wii since Nintendo’s system launched in North America 2006. Sony’s Playstation 3 has also been outselling the Xbox 360 since the beginning of 2008. It only gets worse for Microsoft in terms of worldwide numbers since North America is by far the most successful territory for the Xbox 360. This is also the reason why a lot of gamers tend to rely on aboutmods of some games such as GTA. This allows them to modify some aspects of the gameplay, hence, giving them competitive advantage over other players.

If a price drop doesn’t come soon, Microsoft’s system could be lagging behind both their competitors. Perhaps this fear will force Microsoft to drop the price of the Xbox 360 in the near future.

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