Yes, Microsoft has lowered the price of the Xbox 360 console. You can get the standard system for $299 and the arcade version (no hard drive or backwards compatibility) for $199. Ignoring the worldwide dominance of the Nintendo Wii, Microsoft has remained ahead of Sony here in America (though Sony is catching up). This price cut should insure a sales hike for Microsoft–both versions of the Xbox 360 are now cheaper than the PlayStation 3 ($399).
But, the $199 price point is more than just a slight pick-me-up. It is now the lowest price console of this generation. But more than that, in the video game industry $199 is considered a sweet spot. It is where, historically, sales of a system increase dramatically as the console goes from expensive luxury item to fun impulse buy. Now, I probably shouldn’t be citing a figure from my spotty memory, but something like 75% of the over 200 million PlayStation 1 and PlayStation 2 consoles bought were sold at the sub-200 dollar prices.
Microsoft has beaten both rival Sony and mainstream powerhouse Nintendo to that mark. And both companies have said they do not intend to drop their prices. This holiday season will prove whether or not historical trends prove true. Or will the motion-controls of the Wii and the Blu-ray capabilities of the PlayStation 3 keep those consoles competitive against the less expensive 360? Stay tuned.