NEWS - Wednesday, May 14, 2003
Microsoft Cuts Xbox Game Console PriceLOS ANGELES (Reuters) - Microsoft Corp. on Wednesday cut the price of the Xbox video game console to $179.99 in the United States, matching the price cut announced a day earlier by Sony Corp. for the dominant PlayStation 2. A Microsoft spokeswoman said the near 10 percent price cut from $199 took effect immediately. Some retailers were already showing the new price on their Web sites. Sony said it cut the PS2 price from $199 on Tuesday to clear out inventory ahead of the June launch of a redesigned version, which includes an adapter for networking. That package is expected to sell for $199. Both price cuts took industry watchers by surprise, coming as they did at the start of the Electronic Entertainment Expo, the video game industrys annual trade show. Sony Computer Entertainment of America President Kaz Hirai and Microsoft Chief Xbox Officer Robbie Bach both told Reuters within the last week they saw no need for a price cut. "Were very comfortable with the way things are selling," Bach said on Monday. On Wednesday, Hirai told Reuters he thought Microsofts move had been premature and said Sony still intended to charge $199 for its new package coming in June. "I think that ... they may have jumped the gun here," he said. Satoru Iwata, the president of GameCube manufacturer Nintendo Co. Ltd., played down the possibility of a price cut for its $149 console, which currently comes with a free game. "I really dont think there is an urgent necessity to cut the price," Iwata said. Retailers had been clamoring for a price cut, according to games publishing executives, as the move usually brings a sharp rise in sales. However, most were expecting that any price cut on the consoles would be $50 rather than $20. Many had also assumed that the next round of discounting by the game manufacturers would not happen until the fall in order to provide a lift to sales during the crucial year-end holiday season.