Game on: Microsoft cuts Xbox and games prices

Microsoft has celebrated the second birthday of its Xbox gaming machine by cutting the price of the console and selected games in a bid to claw market share away from Sony’s market leading PlayStation 2.

Microsoft yesterday announced worldwide price cuts on Xbox as well as selected games bundles. In Australia, Microsoft has cut $50 off the console price, which will now retail for $249.

The games vendor has also sliced prices of its Xbox Halo Elite Force Pack – reduced $50 to $299. It has also slashed $30 from the price of its Music Mixer (now $49.95) and Project Gotham Racing 2 ($69.95).

Amped 2 and Counter Strike have been reduced by $20 to $49.95.

“We are making a clear statement here – we mean business in Australia,” Microsoft’s home entertainment regional director, David McLean, said.

Speaking to ARN earlier this month, McLean claimed that Xbox’s market share was running at between 34 and 37 per cent.

“Xbox was the only platform that grew last year,” McLean said. “In the second half of last year sales grew 10 per cent. The other two platforms declined.”

Microsoft was keen to point out that the price cut puts Xbox $50 below its major competitor.

But a spokesperson for Sony Computer Entertainment (SCE) said that it had no plans to further cut PS2 prices in response to Xbox’s latest move.

SCE released two bundles on March 25 which include a PS2 console, 2 controllers, DVD remote and a Platinum game. The standard bundle with a black console is $329. The bundle with silver console and remote is $379.

While Xbox is still running second to the older Sony PS2, Microsoft claims to have sold more than 400,000 consoles in Australia, generating $300 million in retail sales.

Much of the value in gaming consoles lies in the ongoing revenue from games purchases, an area Sony claims to have stitched up.

“15 of the top 20 games last year were PS2, across all formats,” a spokesperson said.

More than 340 games have been launched for Xbox since its debut two years ago, according to Microsoft.

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