The cut comes as the competing system from Nintendo, the Gamcube, is due to reach store shelves next month on May 17. The Xbox RRP is now AU$399. The launch price (RRP) of the Gamecube is also AU$399.
This shuffles the price hierarchy of the three available current-generation video game systems. The Sony Playstation 2 is now the most expensive unit at AU$499. The Xbox and Gamecube are now equal at AU$399, a massive deviation from the expected gradual price-reduction process. Microsoft is suspected of sustaining great losses on every machine at this new price due to the in-built DVD player, hard drive and networking equipment the Xbox has, which the Gamecube is lacking.
This aggressive move may ignite a savage Australian price war between the vendors of the three console systems, Sony Computer Entertainment, Nintendo and Microsoft. In Germany, retailers fought a bitter battle over the Xbox machine alone, causing prices to drop well below profitable levels.
-This is a strategic, competitive decision," Alan Bowman, director of Microsoft's Australian Xbox division said today.
-The fact is, our pricing here (in Australia) had become uncompetitive and we felt it an obstacle to the Xbox experience." he added.
Mr Bowman acknowledged the bombastic nature of the new pricing tactics: -Since our launch the market has changed - and we are now being unashamedly aggressive in changing it ourselves,"
The reduction announcement was accompanied by the news that Microsoft will be offering a gift to consumers who have already bought the machine, with a retail value of AU$250, the exact monetary size of the price cut. The gift involves two free Microsoft Xbox games of the customer's choice and an extra Xbox controller. The offer is effective from 26 April, 2002. Existing customers can visit the Australian Xbox Web site www.xbox.com.au or call 1800 148 894 for details on claiming their gift.
Don't care how much they cost......I will never help Microsoft extend it's Monopoly in any way , shape or form.
I will never pay for a single Microsoft product again , and that includes operating system's and all games and peripheral's which roll out of factories bearing their name.
I trust them as I would trust a salivating Lion telling me to come closer I don't want to eat you.