Microsoft Talks Xbox 360 Price Drop In Australia

With the news hitting earlier today that the Xbox 360 Elite will drop $100 in price on September 22, I jumped on the phone to Microsoft to ask them why.

I spoke with Xbox Australia's category manager for the console and accessories, Adam Pollington. Our chat began when I asked Adam if he had woken up last week to Sony's announcements and suddenly realised that the Elite was now the most expensive console in the market. He replied that such price adjustments are always planned well in advance.

"It's definitely not a reaction to Sony," he said. "It's quite coincidental that both of us have taken price drops in a similar time frame. I think naturally, promotional and pricing activity does tend to come at this time of the year as we turn to the holiday season. We always take that into consideration and we want to give customers access to the lowest price point we can offer when the majority of those customers are coming into stores to purchase."

I noted that while the Elite had fallen $300 in price since it launched at $749 and the PS3 had now halved its original launch price of $999, the Wii hadn't budged from $399 the whole time. Pollington suggested Nintendo may look to a price drop of their own closer to Christmas.

"You know, we've always taken our hats off to the Wii. They've come to market with a product that is somewhat different to the competitors and has really grown the market to include people who wouldn't normally have picked up a console. They have really opened up the market and that does provide an opportunity for Xbox 360 as well. I guess they haven't really seen the need yet to decrease price, but we'll see what happens in the coming months."

I asked Pollington what he thought of the PS3 Slim. He was quick to turn it back around to his own console, noting that "whilst [Sony]focused on adjusting the cosmetic appeal of the console and taking a price drop, Xbox 360 still presents the best value in terms of gaming and an entertainment experience."

I asked why they hadn't just dropped the Elite to the current Pro price of $399, since they're phasing out the Pro anyway. Pollington pointed out the "value difference" between the storage capacity of the two consoles, "especially if you look at the stand-alone accessory price."

Pushing further, I said surely they would drop the Elite to $399 in time for Christmas and once all the Pro consoles had sold out. Pollington would only refer back to what they've announced today, a $100 price drop for the Elite.

I asked why the Arcade hadn't also seen a price drop.

"In Australia we've been quite fortunate in that, despite currency fluctuations, we've been able to maintain the Arcade at the extremely affordable price of $299," said Pollington. "That's a pretty sweet price point if you look at where that lines up against the competitors; it's actually a fair bit cheaper, almost half the price of the PS3. Considering that you still get access to all the movies on demand, gaming, Facebook, Twitter and so on, it's a very compelling entertainment experience. It's such great value for customers that we didn't feel the need to take a price adjustment on the Arcade console."

I noted that the Arcade plus the 120GB hard drive would cost $500, making it $50 more expensive than the Elite. Pollington explained that it's all about offering choice "because all of our consumers have different needs and wants."

"I think one of the main reasons for eliminating one of the SKUs was to simplify the choice for the customer," he said. "When we first launched we had two SKUs and now we're getting back to that. We now have the entry-level, affordable price point console and the premium, upper-tier choice at a $100 reduced RRP."

Finally, Pollington told me that while the recommended retail price for the Elite is now $449, it doesn't mean you won't see retailers offering it for less, just as they do now.

I asked whether we might see retailers offering the console on its own, minus Halo 3: ODST, for an even lower price. Pollington confirmed that the Halo 3: ODST offer is complimentary with every console.

"I can't imagine too many retailers wanting to sell the standalone console when a free game is on the table for their customers," he said. "It's not like the retailer has the choice of whether to drop the Elite by a further $100 or offer Halo 3: ODST, the new price of the Elite console is $449 and Halo 3: ODST is a complimentary bonus to that during the launch period."

So it looks like I was bit off with the predictions I made last week for the 360. I'm a little surprised the Elite didn't drop straight to $399, but I guess there are still a few too many Pros left at retail. I also find it a bit weird that Microsoft is still producing two different hard drives, when they could surely reduce costs by manufacturing just the 120GB drive.

Still, $449 for the Elite and a copy of ODST is really a pretty good deal. What are your thoughts on the price drop? Where are your console hardware dollars going to go this year?


Comments

    If you add on an Xbox Live Gold subscription and a Plug and Play Kit (or batteries) then it's more expensive then a PS3 Slim by roughly $50. Plus there's no Blu-Ray.

    Then he talks about the Arcade and its value - the only thing the Arcade is good for is to replace your original 360 when the DVD drive dies or it red rings.

      I know quite a few people who went with Arcade packs and haven't bothered upgrading any of the components. Its easy for people like us who really get into gaming to forget that a lot of new users are just looking to replace their PS2.
      From their point of view there's no reason to bother with a hard-drive as long as you've got a memory card to save to.

      The Arcade makes a lot of sense if you're a game every month or two gamer.

        The arcade is great if your Pro red ringed and you just need a replacement console.

      I haven't bought an Xbox Live subscription, and I don't care about a Plug and Play charge kit (I replace the batteries in my controllers about every 6-8 months). The Arcade SKU suits my gaming habits perfectly, and I'm glad I don't have to spend extra money buying stuff I don't want.

    the elite does not come with plug and play charge kit?

    you cant consider blu-Ray... not everyone wants that.

      But you can't rule Blu-Ray out - if you do want it in the next 5 years then are you suppossed to fork out another $500?

      And no, Elite doesn't come with Plug and Play charge.

        "But you can’t rule Blu-Ray out - if you do want it in the next 5 years then are you suppossed to fork out another $500?"

        In 5 year time, a BD player will be sub $100. They will be generic commodity items, just as DVD players are now. Many shops won't bother stocking them because there won't be a profit margin.

        In the US, this Christmas, Walmart will have US$99 BD players. There's a flood of chinese BD players on the way.

        If you want a BD player, you can get one. And if you buy one later, when BD media prices come down, you'll save. So BD is not an issue in this current console war. It's just an excuse to defend the PS3's high price for the last 2 years.

        If I wanted it in 5 years, I'd just buy a $99 Blu ray player to compliment my 360 :)

    My thoughts are that this price drop is no 'coincidence', and MS are still spin kings (a title which they are NOT exclusive holders of...).

    Regardless, the new Elite price is pretty nifty. Mind you, they should throw in 3months of Gold-XBL for free.

    As for the HDDs, with the Pro about to do the Harold Holt, it makes no sense for the 60gb HDD stand alone to be manufactured either.

    My hardware dollars are still going to a G27+GT5 combo, release dates permitting.

    “because all of our consumers have different needs and wants.”

    No one wants to spend $100 on a Wireless Adapter Microsoft, nor $150 on a HDD.

    It's great that the Elite will drop from its former ridiculous price, but:

    "Pollington pointed out the “value difference” between the storage capacity of the two consoles"

    This raises the long standing issue of Microsoft's ripoff 360 hard drive prices.

    The 120GB HDD retails for $150. Compare this to a 120GB PC HDD (essentially the same bar the plastic casing), which will set you back only $50. lolwut?!

      I got a 500 GB HD for $90, this is why I like PC.

    I look forward to the day when all consoles are cheap enough for everyone to afford, so fanboys on all sides don't feel the need defend their purchase as though it's a holy war.

    And on that day, we'll sit together and discuss our shared hobby thoughtfully and politely, discussing which console in our humble opinion has the best games. On Mars.

    "Then he talks about the Arcade and its value - the only thing the Arcade is good for is to replace your original 360 when the DVD drive dies or it red rings."

    BS.

    The Arcade is a great machine for the price. If you just want a games console that plays most any 360 game, and you don't want to be online, it's a great buy.

    At least the Arcade has provided customers with choice. And it's easy to upgrade. (Know how much you can buy a 20GB HDD online for? Pittance, that's what.)

    It may come as a big shock to you, but many people don't play online.

    Even Sony's own statistics show that less than HALF of PS3 owners are connected to PSN...

    I find it somewhat amusing that it seems to always be the PS3 fanboys starting the arguments in this current debate, as if they feel they need to defend the PS3.

    As soon as this story comes up anywhere, someone supporting Sony pops up straight away and says "Yeah, but it has Blu-Ray and the 360 doesn't come with an HDMI cable"

    Does the PS3 slim come with HDMI and/or component? What is the point of Blu-Ray if you only have a composite video cable?

    Cheers

      I find it amusing that once someone says something against a particular company that they are immediately declared a fanboy.

      The reasons I said it was more expensive was because of an Xbox Live Subscription and the Plug and Charge kit. I mentioned it didn't have Blu-Ray but I didn't factor that in.

      Didn't mentioned HDMI - but hey, way to contribute buddy.

        Whoa! Relax! lol...

        I use the term fanboy very loosely for starters, and I am not only referring to your post.

        Oh and thanks, I enjoy the odd contribution, mate.

      nom nom nom nom nom

    i find it amusing that game companies will say look at europe prices as we are in pal region for comparision not US.....

    Ok so let me get this straight microsoft the elite in the UK is equivalent to 388 and we pay 450....rip fucking off

      "Ok so let me get this straight microsoft the elite in the UK is equivalent to 388 and we pay 450….rip fucking off"

      Well, maybe, maybe not.

      For starters, you need to add 10% GST to the price.

      Then, you have to add in the higher costs of transportation, shipping and retailing in Australia. Our transport and port costs are higher relative to the UK, and the cost of doing business per unit sold is higher due to distances and relative population. (The cost of doing business, per prospective customer is higher.)

      Then you have variances in the x-rate, which work both for and against the manufacturer. (I don't see many people complaining when the cost of retailing goes UP for the manufacturer, just like people don't bitch and moan when petrol prices go DOWN...)

      It may seem like a rip-off, but once you start doing the business math, things are less easy.

        @ womble don't forget to take off VAT in the uk which is 15%

        we are geting ripped.

        ps its "maths"

    “It’s definitely not a reaction to Sony,” he said.

    Of course not. These guys must go to the Orwell School for Spin.

    Of corse its dearer to buy an Arcade and then the 120GB HDD. Its all business which makes perfect sense.

    Most people buy a Arcade really.. well besides the Pro. But those buying for younger kids would buy the Arcade. IF they kid needed a HDD 60GB or 120GB then the parent would go buy one. More money for MS. All companies do this!

    Not everyone looks at every detail and notices. Oh this is cheaper, i'll come into Kotaku and check it out or this site etc...
    Gamers look into that stuff and i'm sure more people are now with the recent recession and the price of everything being so expensive and all. But its to get the people who don't take note of such things.

    I'm sick of the whole Xbox vs PS and the Blu-Ray mentions. NOW if people want Blu-Ray then go buy a PS3. I have both and own NO Blu-Ray movies. Why do i need them? It's no better experience to me. I don't benefit from it, not even my wallet does. DVD's drop in price quicker than BLURAYS and some Bluray movies still launch at a more expensive price than standard DVD.

    When it comes to the 360 Arcade you'd be more realistic comparing it to the Wii than the PS3. In both terms of price point and market.

    The price drop suits me fine. I've been a PlayStation only gamer for too long. My PS3 has bricked, so now I can pick up a PS3 Slim and a 360 Elite for less than what I paid for my original 60gig system.

    It'll be nice to finally find out what this Halo thing is all about. Especially for no extra cost!

    Specs aside, My biggest quarrel with 360 purchasing is one that involves reliability. These elite's are probably falcon's and some may be old stock from retailers like zephyr....shudders. The only elite i know that has been confirmed by m$ as jasper is the red elite from eb games. They even offered me $200 for my 20gb falcon for trade-in. This meant i only spent an extra $300 for 120gb hdd, new controller, headset, hdmi, re5 and a new jasper console. My mate bought an arcade recently and hes got disk drive issues. Joy! If xbox didnt have halo and the online community then they would be getting pwned by sony.

    Lol. Wumble, It's ironic that you spelled `Getting' wrong when you replied to Womble's post.

    `` Wumble
    August 29, 2009 at 5:28 AM

    @ womble don’t forget to take off VAT in the uk which is 15%

    we are geting ripped.

    ps its “maths”''

    I already have an xbox360, dont get me wrong a 100 price drop is good, but when you bundle in the cost of either buying a HDMI cable or a component cable (the official ms ones) your really only saving 50 more than before

    I know you can buy cheap HDMI cables, but if your like me and you need the MS audio adapter to do 5.1 via optical to a sound system, you really have no choice but to buy the MS cable

    I cant help but feel if they had of reduced the price to 400-450, included a component cable/HDMI and dropped the price of the wireless adapter to 100 they really would have stuck it to sony even more this generation....and likewise sony would have done even better if they had BC for PS1/PS2 still..

    As I see it yes 500 is good for a PS3 with bluetooth/wifi/rechargable battery solution, but the fact of the matter is I wouldnt use blu-ray at all (have way too many dvd;s and the picture quality while improved over DVD doesnt make it a must have for me)

    Also while one could look at the PS3 and xbox side by side and say well the PS3 is better value, the online side of things is better with XBL (but PSN is improving)

    But at the end of the day it is a "Games console" and the main reason people will buy it is for games, the xbox has a much better library, games are better supported for Xbox then Ps3 (see fallout 3/GTA content) they run better and look better.

    I have come so close to buying a PS3 with the price drop (like about 10 times ive gone to ring up my local gamestore and pre-order a slim)

    but the lack of linux support and BC removal (I know the BC has been gone for ages), and also the lack of system killer exclusives, has made me decide to stick with my xbox360, that and the controller for the 360 is much more comfortable for me then a PS3 controller (and the cost of 100 to buy another dual shock ps3 controller as opposed to 65 for a xbox one)

    also because im with IInet I do get all my xbox live downloads free of charge (videos,demos,arcade games,updates etc) and thats a big deal for me when you consider it would be anywhere between 5-20GB of data I dont have to pay for each month...

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