Rumor: Xbox 360 Price Drop In The Future?

Despite earlier word from Microsoft denying speculation surrounding a price cut for its Xbox 360 console going into the holiday season, a new DigiTimes report has again raised the possibility, though unconfirmed, that a drop in price is indeed in the works. Citing unnamed Taiwan-based OEM component manufacturers, the report claimed that Microsoft has negotiated lower production costs for the Xbox 360 with manufacturing partners in Taiwan in order to drop the price of its premium Xbox 360 package by $100 to $299. The report noted that its sources estimate the total production cost savings for Microsoft to be between 15 and 20 percent. The move, according to the report, is being introduced in an effort to “maximize the price competitiveness” between the Xbox 360 and the forthcoming PlayStation 3, and to ensure that consumers will be able to purchase both a console and the upcoming external HD-DVD player for $399. The PlayStation 3, which will include a Blu-ray drive out of the box, is expected to launch on November 17 with two separate SKUs, the high-end of which will cost $599. Microsoft group manager of PR John Porcaro flatly denied any intention by the company to drop the price of the Xbox 360 in June, and noted that “the official word from folks in the know is that there are currently no plans for a price drop this fall.” In addition, several online observers have weighed in, suggesting that the high price of the PS3 means that an Xbox 360 price drop may be unnecessary this holiday season, despite Porcaro’s comments to the contrary. However, it's also been noted that Microsoft would be very unlikely to announce any Xbox 360 price cut until the very last moment, to ensure as few consumers as possible were dissuaded from buying the console at current prices.