Here's Microsoft's official press release regarding the price
drop. It's important to note that it confirms yet another drop in
Japan next week, but still no word on whether accessories will be
dropped or not.
Reduces Xbox Price to $199.99 (U.S.)/$299.99 (CAN)
New Price Is Expected to Expand Market for World's Most
Powerful Video Game Console
REDMOND, Wash. — May 15, 2002 — Through a
carefully planned effort that includes the participation of key
retailers and third-party publishers, Microsoft Corp. today
unveiled its plans for a North American price reduction of the
Xbox™ video game system. Effective immediately, Xbox will have
an estimated retail price of $199.99 in the United States ($299.99
CAN). The price reduction will be supported by a multimillion
dollar national merchandising and marketing campaign set to begin
this weekend. Microsoft also announced it is reducing the price of
Xbox in Japan to 24,800 yen effective Wednesday, May 22.*
Xbox was originally priced at $299.00 in the United States,
$459.99 in Canada and 34,800 yen in Japan.
part of our long-term strategy to broaden the reach of Xbox and
make it accessible to more consumers, we've been working for
several weeks with our key partners to make this announcement as
seamless and high impact as possible," said John O'Rourke,
director of worldwide Xbox marketing at Microsoft.
With its cutting-edge technology, advanced graphics engine, hard
disk drive and built-in Ethernet port, Xbox has been globally
acknowledged as the most powerful video game console in the world.
And with a rapidly expanding games portfolio featuring such titles
as Game of the Year** "Halo™," Xbox has become the
system of choice for millions of enthusiasts around the globe.
"This new, lower price makes Xbox the best value among all
competing video game systems," O'Rourke said. "The best
box is now the best value."
O'Rourke acknowledged that speculation surrounding a pending price
reduction of Xbox has been pervasive in the last few weeks.
"The traditional forum for making an announcement of this
magnitude is the Electronic Entertainment Expo (E3) next week, but
we've been ready to go for some time and can easily put this in
place at retail now. We see no reason why eager gamers should have
to wait a week to benefit from this tremendous value
"Xbox has been working closely with us to roll out this new
pricing. We're confident the planned marketing and promotional
support behind it will really drive store traffic and bring Xbox
to the attention of a lot more gamers," said Dan DeMatteo,
In just six short months since its highly successful North
American launch, Xbox is experiencing a software attach rate of
4.1 in North America, the highest of any video game console ever.
And recent momentum in Europe and Australia demonstrates strong
consumer demand for Xbox.
Microsoft currently expects to ship 3.5 million to 4.0 million
Xbox consoles for the fiscal year ending June 30, 2002. The
company is not providing any update to financial guidance provided
on April 18, 2002.
response to Sony's PS2 price drop
yesterday, early this morning
Microsoft dropped the price of its Xbox a full $100 to a new
matching MSRP of $199.99. While Microsoft hasn't officially
announced the drop, most major online retailers (including
Electronics Boutique and GameStop, although oddly not Amazon) have
as of 1am EST begun selling the Xbox at $199.
Obviously they wouldn't be taking that kind of loss on the hardware
unless the price drop was official, as there's no way retailers
could make money off of the hardware under the old pricing
important to note that as of yet no accessories have been reduced in
price, whereas the PS2 saw massive cuts in controller and memory
card prices as well. The price drop isn't yet official,
but we should have Microsoft's official word anytime now.