Microsoft confirmed Thursday that it is cutting the price of its top-of-the-line Xbox 360 gaming console by $100, setting the stage for a possible price war among the major video game manufacturers.
Microsoft said that beginning Friday, the price of the Xbox 360 Elite console will drop by $100 to an estimated retail price (ERP) of $299.99 in the U.S.
The Xbox 360 Pro console will be priced at $249.99 ERP, down $50 from its earlier price, while pricing for the Xbox 360 Arcade console will start at $199.99 ERP.
"If you're looking for deep [gaming] experiences that don't require deep pockets, now is the time to purchase an Xbox 360," said Shane Kim, corporate vice president of strategy and business development for Microsoft's Interactive Entertainment Business, in a statement.
Rumors of Microsoft's coming price cuts have been circulating for weeks as advertisements announcing the move began to leak out in advance. The cuts have also been anticipated as a competitive move against Sony, which earlier this month cut price tags on its current line of Playstation3 game consoles by $100 and introduced the PS3 Slim.
Video game sales have been hard hit by the recession. Earlier this month, NPD Group released a report showing that sales of video games and consoles in July were down 29 percent from one year earlier to $848.8 million, marking the fifth consecutive month of decline. Year-to-date sales at the end of July were $8.16 billion, down 14 percent from the first seven months of 2008.
With the holidays approaching, competing gaming console manufacturers, including Nintendo, which makes the best-selling Wii system, may be forced to respond to Microsoft's price cuts.
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