Deeper Xbox 360 Price Cut Coming with Falcons?

Generally, forum posts are dubious and not newsworthy. Unless a forum post is written by a known industry insider or offers some exclusive information or rumor, it should never be reported to N4G.com.

However, a particular post about Xbox 360 price cuts seems to have some degree of merit. Two-to-three days before Joystiq leaked the Circuit City flyer photos that announced the mult-tier price cut, a post in a NeoGAF forum post had correctly reported the unusual $20, $30 and $50 separate price cuts for the Core, Elite, and Premium models. That is an amazing prediction that has turned out to be correct.

However, that is not all to the post. Here is the forum post in its entirety:

"Originally posted by artredis1980 on July 29, 2007:

I have it coming from a reliable source that CURRENTLY

The Core will drop to 279
The Premium will drop to 349
The Elite will drop to 449

This will clear out the inventory of the Premium which is the most manufactured 360 and the most sold as they know Premium will sell the most until the demand for Elites pick up in 2008. Elites and Cores have relatively the same manufacturing percentage: low at the moment until FALL this year.

When the 65 nm processor falcons are introduced across all SKUs, the holiday season, a month or so after Halo 3 will see the core drop to $249, The Premium will drop to $299 and the Elite will drop to $399

The Core, Premium and Elite Falcons will have a redesigned motherboard which includes HDMI across all SKUs, a quieter DVD Drive and the falcons will STILL have an extra fan heatsink as Microsoft is not prepared to take anymore risks.

The Falcon will reduce the cost to manufacture the Xbox 360 CPU and GPU by ~40-50% but Microsoft will incure additional costs on the new fans and HDMI across all SKUs. Still at the 249,299 and 399 price, Microsoft will expect a profit from the console by early 2008 when the Q4 results are announced."

(End of the forum post.)

Of course, even though the forum post had correctly reported the unusual multi-tier price cut two-to-three days before the leak of the Circuit City flyer, it is still a forum post. So please take it with a grain of salt.

Note: the story image is not an actual price cut.

[no_more_heroes]

take with just a grain of salt? It must mean one big a$$ fVck!n grain then.

[marinelife9]

Offer me a Falcon Premium with the extra heat sink and fan at $299 and I will expand your coffers Microsoft.

[PIMPDURB]

If this post about the various price drops is true, then SONY is in some serious trouble.

[nasim]

after the price cut...ps3 is murdering x360 all around the world.

i terms of sales ps3 has overtaken x360 for the 1st time in NA in JULY
www.vgcharts.org

in EU/JAPAN x360 is already a dead console.

MS should stop producing this low powered and defective console

[CodeMonkey]

stop defending your poor purchase of a PS3. The 360 has been spanking the ps3 and will continue until the next gen console. you sir are a moron

[BLACKJACK VII]

Hmmmmmmmm...

[the_round_peg]

But how the heck could someone predict some weird $20, $30 and $50 and still got the order right ($20 for Core, $50 for Premium, $30 for Elite)? Those were some strange numbers, and they were out-of-order. Why couldn't they be $20 for Core, $30 for Premium, $50 for Elite, which seemed to make more sense just a few days ago?

And then those weird, out-of-order price cuts turned out to be right on. That's why I'm giving special consideration to the rest of that post.

[no_more_heroes]

that Microsoft is fighting fire with fire. Maybe they're trying to do what Sony is doing, only for theirs the prices on the new models are lowered even further not just sooner, but immediately.

[hazeblaze]

Not quite sure I understand what you're trying to say here??? These price cuts aren't happening immediately... their $50 price cut isn't even effective yet!

[no_more_heroes]

when the Falcon models come out will they be at that reduced price or will they still have the price from the previous price cut of $50?

[Robotz Rule]

Good one!;)

[Rhezin]

TELL US EXACTLY WHAT MONTH AND DAY THESE FALCON UPDATED CONSOLES ARE TO COME OUT BECAUSE I DON'T WANNA BUY ANOTHER F!CKING OLD MODEL THAT WILL FAIL.

[MACHone]

Yeah, I agree. You didn't have to shout, though. No hate towards Microsoft, but if I was planning on buying an Xbox 360, I certainly wouldn't be doing it until the Falcon chipsets are standard. So what does this mean for the Halo 3 edition Xbox 360's? Will they have the improved chipset? Or are they just gonna fail like 33% of the rest of them?

[Pain70]

why would you have to buy another one? if the one you have now fails, aren't you getting it fixed for free? i would love to have an upgraded version, but mine (premium and elite) run just fine. and if they break, they get fixed. for free! hopefully if they do ever break, they'll send me a refurb with the new crap in it. i have no worries other than lost gaming time. and considering the line up starting in two weeks, i might be just a little pist (due to wait time to enjoy games) with the down time. buy the $50 MS bumper to bumper coverage and play the $hit out of that thing man. its a toy, ENJOY IT!

[frostbite06]

Yah guys, even if you bought one at launch, your original warrenty is still in effect

[PS360PCROCKS]

Omg that would be amazing! $250 for a console with HDMI? damn.

[i Shank u]

i gotta say man i paid 400 and got no HDMI. damn the astards! lol o well im still happy as hell with component

[okcomputer]

$100 price break on the premium + falcon model with reliable hardware and I'll pick one up the same day. Would be great to finally have both consoles.

[hazeblaze]

This is very interesting news. It will certainly put pressure on Sony to get their own 65nm process nailed down so that they can cut costs as well. I wonder when we'll see this happen??? Must be by the holiday if they expect it to be profitable by Q1 2008.

[Bloodmask]

If this does come true it will mean great things for 360 sales. This would be a good move.

I do think the Falcon 360 is coming soon bc I have read in many articles that Micro has stopped shipping units.

[etownone]

hmm.... if your trying to clear inventory, shouldn't they should have reduced prices on the core and elite a little more?

and when the new falcon comes, i hoping the core for only $50 less the premium comes with a memory card. Then it will be worth the $250 and M$ will pretty much guarantee victory.

[fjtorres]

As the OP pointed out, MS has been building more Premiums than Elites and Cores. Basically, the sales split seems to be running 20-60-20. So it makes sense to reduce the more abundant model the most.
Plus, it establishes the new price differentials up-front.
Think about it; currently, there is a $100 differential from Core to Premium and $80 from Premium to Elite.
The Circuit City scans suggest the August price cut will flip that around to $70 from Core to Premium and $100 from Premium to Elite.
If they then drop prices again in November, as the forum poster suggests, the differentials would go to $50 Core to Premium and $100 Premium to Elite.
The whole thing might be fake but it is *reasonable* fakery if it is. ;-)
BTW, consider what those differentials imply about the add-on drive prices...

[agent864]

will replace my current unit that freezes randmonly with a falcon.

[i Shank u]

i wonder if my 360 dies again a year from now, will i get a falcon refurb?

[Charlie2688]

If MS does this they will take a BIG gamble, they are already loosing crap load of money on the 360 division as it is, they take even more looses this year than previous, they spend even more on the new extended warranty and now they are suppose to cut even more the price when they could recover by using the falcon and keeping the first cut prices...this could mean bye bye to the objective of actually making profit by 08

but again this is a forum post by the classical wishful people the same kind that predicted that with the new processors the PS3 will be 400 bucks this year

@ktchong: I mean the gaming division that handles all 360 related affairs but again the other ones could inject some cash but this wouldn't be the best choice of action

@ktchong: Again as Patcher (and other analyst have said, remember the articles were several analyst sad that MS gaming division is hazardous to the whole company) said MS might be reaching the point were they have been investing too much in getting in to the console industry and they have yet to see any profit in return (that is why Patcher stated the 360 will end up 3rd in the console race), and as a direct quote to another analyst "the 360 bleeds money from MS" and cutting even more the price will not help at all (specially when they said they wanted to make profit in 08), I see you are trying to justify MS market diversification but you are not answering to the problem of a profit-less 360 and a gaming division in the red, also for how long is it gonna be simple investment field? this is not like its their first year doing this, they have been doing this since the original Xbox only putting money in to hope someday money will come out (as it did to Sony with their market expansion back in the days of the PS1) and as you seem to know about economy and companies you must know what companies do when a division has become unprofitable for to long

and by the way I NEVER stated MS would run out of money you came with that on your own

[the_round_peg]

and MSFT paid out over $33 BILLION in dividends to shareholders.

This year, MSFT's revenue is on track to surpass $50 BILLION. MSFT will likely pay out close to $40 BILLION in dividends this year. Unlike SNE (Sony) which is ridden with debts, MSFT has a remarkable total debt of ZERO. In addition, MSFT has $21 BILLION cash on hand.

What makes you think Microsoft will run out of money?

[the_round_peg]

If Microsoft does not spend them on expanding into and conquering new markets, which is the same as investing in the company's future, what do you think Microsoft should spend the money on??

The dumbest thing Microsoft can do is to NOT expand into new markets, NOT invest in its future. Video gaming happens to be the next closest thing to Microsoft's core competency. Microsoft had already been making Flight Simulators and arcade games since the 1980s. Microsoft already had built strong relations with game developers on DOS and Windows. So it's only natural for Microsoft to get into video gaming as an expansion (i.e., this move is actually more like a market extension.)

[power of Green]

Your EDIT in response to ktchong is common sense.

[Staircase]

Microsoft is loosing money from the 360, but it is still gaining money through all of their other products. I think that's what he is talking about.

[PIMPDURB]

The reason the price cut makes sense it to gain market share. If they MS can gain huge market share early (excluding Nintendo, they are a different competitor) they will 1) suck the wind out of sony, and two make profit in the long run like sony is doing on their PS2 now.

[etownone]

pretty soon inventory for PS3 60gig will be cleared out and they will be back to $600.

now come this holiday season, all the kiddies that want to play GTA and HALO can play it on one system, for $350 less than PS3. Yeah we all know it doesn't come with hard drive (maybe free memory card) but the MASS MARKET doesn't know..... and thats what they look, the price.

[Azures]

People aren't as stupid as you think. At least the people who are gonna buy consoles for more than the price of a Wii aren't.

In that other thread you sound your stuck in the baby boom after WW2, not buying something just because its japanese. I'm sure your house isn't filled with a ton of stuff that would make you a hypocrite to that view. The Japanese don't buy the 360 because they don't like or trust Microsoft, gaming culture is far more integrated there and sony/nintendo have been supporting them for decades. Microsoft advertising there is also condescending and idiotic to their culture.

[etownone]

its not about people being stupid, its about getting a GAMING console at a reasonable price, thus the core at $250 will sell to the MASS MARKET.

and its a FACT people in Japan are loyal to their products, another example would be american cars never sell well over there. but the fact that they all have access to internet, and could have read reviews on so many great games so far for 360 (GoW, Dead Rising, Lost Planet, Crackdown, etc. etc..) but refuse to buy a 360 just proves my point.

[power of Green]

NOOOOOOOOO!!!! this is BULLSHIT!!!!!! the is a LIE!!!!!!!. THIS can't be TRUE!!!!!!!, I raced over here and sure enough PS3 fanboys in here complaining the same one trying to debunk the price break in the first place.

[Staircase]

"sure enough PS3 fanboys in here complaining the same one trying to debunk the price break in the first place."

And where do you see that...?

[Crazyglues]

For one we all know about the 65 nm processor and that will be huge for Microsoft in bringing down the price.

With this all happening around the time when consoles are purchased the most, it's a very good move for Microsoft, since this indeed will help them to secure the Christmas sales battle that starts in Nov. Which is the time when people start buying for Christmas and all the store sales start.

So this all makes sense and it will indeed make for a interesting battle to see who sells more during the Christmas season.

And while most people here are Xbox 360 fans, while I am a PS3 fan even though I own a 360, feel this is just good for gaming period. It's a great time to be a system owner, we have amazing games coming to both systems.

And if we didn't have xbox 360 as competition what fun would that be, having one system do all gaming for the hardcore market would suck.

So I love 360 users even if they might hate PS3 owners. (not all do just the real strong haters) but to me it's all good, it's like when you pick a boxer and your friend picks the other guy, no big deal that's the person he liked better for whatever reason and I can respect that. He's still my friend, at the end of the day whoever loses doesn't take it personal. It's just a gaming system.

I wish the gamers would let us play each other in games like Team Fortress 2 which they where going to do at first, but felt it would just create a whole flaming war.

It should be like that, if you like 360 that's cool. If you like PS3 that's cool. Support your system without dissing the next one because they really are great systems, and they both have things that they do very well. Period

[Lightning Mr Bubbles]

It's all about sales. If a console isn't selling, you can be sure they will cut the price. That's true for both 360 and PS3. Neither is gonna just stand and watch. (keep day dreaming 360 fans) What 360 does price wise PS3 will match it. Ken isn't running PS3 anymore.

What a bogus picture of the 360 premuim for $199.

[Like a shadow I am]

Who win? WE! We the consumers win!

So why do you sound so bitter?

The article already specifically states that the story image is not an actual price cut.

[Covenant]

Falcon coming soon, with enhancements?

Looks like it from this anecdotal evidence:

360 shipments to my local Best Buy, GameStop, Target, and Circuit City stores have slowed, with smaller allocations being shipped.

Core now listed as "deleted" at Best Buy, indicating that SKU--but not necessarily that model--is done.

At least 2 scans of forthcoming ads indicating a $50-$80 price cut on all 360 models.

My store NEVER carried HDMI cables marketed for the 360 before, yet now we do, and since the Elite includes an HDMI cable, why the need to market it? Unless...all 360 models will soon have HMDI?

Madden releases in 2 weeks, BioShock shortly afterwards, and we're less than 2 months away from Halo 3...Timing is everything.

Bad publicity from the RRoD issue can be resolved with reassurances of a redesigned system that will (hopefully) fix those problems...and a price cut won't hurt, either.

Core at $249, with an in-pack memory card (and HDMI?) that would be a more direct competitor with the Wii?

Pro at $349, w/all the regular features, and HDMI?

...The next few weeks shall be interesting.

[M1am1U]

I would not be the least bit surprised if this happened. They whet people's appetite with a price cut, clear out inventory and then drop the bottom out of the price once the new hardware is available. With such a small initial price cut at first, I can't help thinking that there must not be a whole lot of surplus inventory on current SKU's. It will be interesting to see what happens in the next 60 days.

[Imknow1]

Hearing that the production of the new hardware will be faster and cheaper, had they launched this year, sales for the 360 would be better and surpassing the installed base of the PS3 :/

[Like a shadow I am]

Sony cuts prices. Microsoft cuts prices. Then Sony cuts more prices. Then Microsoft cuts even more prices.

Who win? WE! We the consumers win!

So why are Sony and PS3 fanboys so angry and bitter when Xbox 360 has a price cut? They should be happy because Sony will be forced to cut prices on PS3 as well - and when that happens, we the consumers win!

[dale1]

xbox360 isn,t selling well except in the america now its losing sales to ps3 and wi both selling more in july thats why theres talk of it been reduced but it could be limited to get rid of the old systems as the new system will cost more to build

[aiphanes]

If the pricing struction is correct...then $399 for the elite is a good deal...but there is still no HD-DVD drive included...

Sony will respond with a 80 GB PS3 for $499 and a 40 Gb PS3 for $399...The 40GB PS3 for $399 is still the better deal than the Xbox 360 elite...since you can go and get a 160 GB 2.5 inch SATA drive for $90 extra....and you get wifi and memory card readers and bluray.

But i like the new possible microsoft pricing structure...

Now sony could go deeper and price the 40 Gb PS3 at $349.....and $449 for the 80GB PS3 without a game....We all know there is not price difference between a 60 GB 2.5 inch sata and a 80 GB 2.5 inch sata..

Sony is also going full 65 nm chips also...starting with the 80 GB model...

[power of Green]

PS3 was losing in sales every week untill the PS3 clearance to the day. #20 your fanboy logic baffles me.

[Lightning Mr Bubbles]

People are buying whatever the hell is cheaper. PS3 started selling better when it cut to $499 if XBOX 360 cuts it's gonna sell better, and that will probably force PS3 to cut again. I still believe there will probably be a $399 PS3 sku out this holiday. I just don't think Sony is gonna sit back and watch 360 get all the sales because it's way cheaper. That would cost them more in the long run.

[ReBurn]

Doesn't history tell us that hardware manufacturers revise components and reduce costs? And don't they always pass those savings along to broaden the installed base? What's the point in arguing over this? We're all bright enough to know that as time goes on console prices will drop. This fall the 360 will be two years old, so it is time for the prices to fall.

[530xd]

since they have been waiting som long to put the Elite to europe I would bet my paycheck that Falcon-pack is included.
It would make sense?

[BLACKJACK VII]

Fall & Christmas 2007 just got even BIGGER for Xbox360 !!!
Cant' wait for Bioshock, Mass Effect & Halo 3 !!!

[CrazzyMan]

and i`m in. =)

then, ps3 for 399$ and there won`t be fanboys left. :) Everyone will have full gaming experience. =]

[Kyur4ThePain]

Why do you need HDMI on a console?
If it is needed for something other than games, why wasn't it there to begin with?
I just don't get how short sighted MS seems to have been with the 360.
I tell you, it will not be long before HD-DVD or Blu-Ray is used for games on the 360.
What's next? A motion controller?

[chavafx]

per console sold and they are giving a free game so if they do that that means sony wont have a single net profit overall and that a big risk for a conpany

[the_round_peg]

People will want a price cut after Microsoft lowers 360 prices. Either Sony gives us another price cut or else.

[power of Green]

Staircase - 1 Hour ago

PM
Track
Ignore
13.1 -
"sure enough PS3 fanboys in here complaining the same one trying to debunk the price break in the first place."

And where do you see that...?

RESPONSE:^^^^ All over the place...!

[Combat Survivor]

We all know that currently the Xbox 360 is going to get a price cut...the news leaked just the same way Sony's PS3 price cut had. But one has to wonder if this is to do the same thing...liquidate old stock of a product, and then bring in the newly refined, more efficient stock of Xbox 360 consoles. I for one don't care because all of the Xbox 360 Elites have the fix in them. Other that buy these will know that the warranty covers them well, even if there is a big risk in buying the liquidating stock of Xbox 360s.

[PS3Rebel]

just like HD-DVD - 360 is following their footsteps hahaha

i would wait - i think after this they are gonna start giving them out for free lol

holy how much has MS lost this year on the crap60...honestly - i think itll hit a zillion dollars hahaha

[fjtorres]

Mostly...
Thing is MS is not quite playing the 360 game *solely* for marketshare. They can't. Because of the way PS3 has launched, MS is walking a tightrope (called the shadow of antitrust) where they need to build up installed base as quickly as possible while at the same time making something ressembling a profit within the next year so that if Sony totally tanks it, they can't claim MS is competing unfairly. (Never mind that it is Nintendo and not MS that is eating Sony's breakfast and lunch).
So the result is that MS has to do any price-cutting very carefully. This two stage cut makes sense because the first one (if the Circuit City scans are real) can be cast as a response to Sony's inventory clearance pricing and the second one as a result of the savings from the Falcon Mobos. Bottom line: Nobody would be able to claim predatory pricing and sic the lawyers at MS.
Life is tough when you're MS. ;-)

[chavafx]

in just 3 months they made 3.2 billion dollars of yes net profit and sony bearly $545 million dollars in net profits

[Salvadore]

It doesn't seem reasonable to have another priedrop when your company has lost 1 billion on a 3 year warrant.

[jlemdon]

I'll be getting a core $249 during November or December.

[THE TERMINATOR]

On another note, the Ps3 has sold 38000 units in japan since the launch of Everybody Golf which was released 2 days ago (180000 units)and the 360 sold 3800 because of Oblivion. The 360 is dead in Japan.

[nasim]

after the price cuts PS3 is murdering x360 in NA

It seems no one wants x360 anymore.

all halo 3 pre-orders were cancelled in EU.

In USA most of the x360s are now being traded in for ps3s.

poor MS and x360

www.vgcharts.org

[Odion]

you do realize that you say the same thing everytime.

On a different note

The Core, Premium and Elite Falcons will have a redesigned motherboard which includes HDMI across all SKUs,

this does make sense, since the Halo 3 SKU has an HDMI port its logical that they may extend that out, why wouldn't you just use those HDMI cases since your already making them.

[Tempo]

what..did a more competent member of your family typed that for you so u just copy and paste because u can't do it for yourself.

[RelloC]

i have never ignored anyone on this site, simply because every now and then even the most biased of people on this site still have something uselful/entertaining to add to a convo. you are a different story.

congrats! you popped my ignore cherry.