that's a natural move, but it could have been much more impressive (and deffinitive against sony) if they had it planned as a long term move and had ready a slim version of his Xbox360, imagine it...the day after the slim and cheaper ps3, a slim and cheaper xbox360....

and it wasn't that difficult to figure that sooner or later sony was going to release a slim version. they did it with PsOne and PS2.....

@ Samuel
"...and had ready a slim version of his Xbox360"
How? They aren't able to solve the thermal problems in their current models!
The point is, Sony is a hardware and MS a software company, and each has it's strengths and weaknesses.

I agree with Kouga, that would be difficult. Even at $299 the Elite is NOT a better value than the PS3 Slim. I don't see this price cut helping Microsoft. Maybe they have something else in the works for the holiday season.

obviously I wasnt proposing a realistic commercial plan, it was only a theory :)

I know about the thermal problems...even if I haven't had them...yet

I dunno; this move could be a good thing or a disasterious event for Microsoft. Look at it this way; you have the PS3 being offered at a price point that will more than likely finally convince the core customers-those that have been wanting the PS3 for it's blu-ray features, wireless internet, multimedia features etc.-to pick up the PS3, which is a hell of a lot of people for Sony I say. The added bonus in Sony's coup for this is that the PS3 is spared any RROD curse, and those customers-who are very educated in the technology of both platforms-will more than likely see a $299 PS3 Slim worth their money moreso than a $299 360 Elite, for the reasons I just listed and likely others as well.

Conversely, you have to consider the 'casual' customers. You might also need to consider that they may either be in the market for a high-def system outright (which would drop the Wii out of their purchase plan; chances are they already have one ;) or are shopping for cheaper alternatives to the Wii. Now, why would I bring up the 'cheaper alternatives' bit?!? Because you still have the $199 360 Arcade on shelves, and-according to this report-MS will still be manufacturing those, that begins looking like a mighty tasty choice for them to snack up. A $299 PS3 Slim still can't compete for them, for that these are customers who might be wanting to get into the high-def gaming arena, but more or less solely for the games; they could care less about "superflorous" multimedia functions or blu-ray. It's also safe to assume this pool is larger than the 'core' pool,..and then you get to noticing that this price reduction and Pro phase-out is a pretty damn smart idea on MS's part ;)

I guess we'll know in a little bit of time how things will go down, but I do have the eerie feeling that the second scenario is likely to be the driving force on the market, and if that's the case, Sony's strategy for the $299 PS3 Slim might have just been defeated before it even got underway. I'm in no way wanting for this PS3 to fail, yet it also just happens to be that I look at these sort of things from a (I would like to thing) unbaised, indifferent view; just trying to see the factors at work. I sincerely want good results for the PS3 Slim, but unless Microsoft also drops the Arcade model within a few months, Sony might just be courting in that core audience...and little more.

Haha, so they decided to do it, eh? Well, I believe once the slim comes out, I'm going to be one happy man. $299 is a lot better than $399, plus I'm still a Playstation fanboy as much as a Nintendo fanboy, so I'm going to buy it solely for the biased factor. Plus, PS3 just seems like a better fit for me than the Xbox, which I will continue to dislike as I have since its release (though it did release some interesting games during the first year of the original Xbox). In either case, Microsoft can bite it.

I don't see how a price drop is anything but a good thing unless it puts the console maker out of business. Maybe Nintendo is the one at a disadvantage now? Also, what about games? If there is an argment about one console versus the other, it only seems relevant to include the software that supports the hardware in this argument. It seems like MSFT still has the edge on the widest inventory of hard core to medium core games as well as online ops. Their online network has no challenge from Sony or Nintendo in the foreseeable future from a useability or content standpoint. Nintendo has yet to embrace either the real gamer or the online gamer so again, who's at a disadvantage here? Seems to change depending on who you talk to.

Actually, Mark, Sony's PSO is a lot less laggy than Microsoft Live after they gave it a revision. I have tons of people who play online saying how its so much more smooth and has less latency than their Live counterparts.

Cordero, at least you admit you're a Sony fanboy LOL

Why did they cut the Pro? MS killed the wrong model. The crippled no Hard Drive Arcade should have gotten the chop, making all the currently offered 360s standardized. Or am I missing something here?

It all comes down to the quality and prices of the games. Unless XBox360 can come out with good exclusive games that aren't available on PC, I'll stick with PC. PC games are cheaper in price too, and can easily outperform XBox360 in power and graphics.

Eric Carr said: "Why did they cut the Pro? MS killed the wrong model. The crippled no Hard Drive Arcade should have gotten the chop, making all the currently offered 360s standardized. Or am I missing something here?"

No you aren't missing anything. I'm as puzzled as you are.

I understand that MS had this planned for a while but I don't think they ever thought that Sony was going to reduce the price of the PS3 to $299.

So right now you have two $299 consoles. They are equal on most aspects (ie. HDD size) but one can play BluRay movies and has built in wireless capabilities.

This on top of the fact that MS seems to have removed HD cables from the Elite model demonstrates to me that someone went certifiably crazy at MS and has somehow managed to run the Entertainment Hardware division at MS.

Had MS kept the 60Gb (or 20Gb model) and priced that at $199, they would still have the price edge that they've had for so long.

Let's see PS3: (Wireless/Blu-Ray/Browser/Free PSN) vs. 360($100Wireless/No-Ray/Browser less). PS3 you get all that for $299. 360 to get all that $50 (per year for life of the unit) + no blu-ray (or buy one for $150 to ?) + $100 Wireless adapter and no browser ever.

Well, would MS be smart enough to include their Wireless adapter or at least a free year of Live? . Not yet: http://www.xbox.com/en-US/hardware/x/xbox360elitesystem/. Hmmm. It has an HDMI port. And oh yah, a head set (whooppee! that'll bring in when they realize it will cost them another hundred to use it).

P.S. I forgot, PS3: RROD not included.

MS is about to lose all the ground they gained, because they can't figure out how to pack in value. So much of their investment has gone into paying off the cost of faulty units. If that hadn't happened they probably could meet the value of the PS3, but they can't because it would destroy their bottom line, in other words they would win the battle, but lose the war. Which is what every body said about the blu-ray. Lot's of irony here.

This bundle is weak. The elite can't match the PS3, as such it either needs to be lower priced or have a bunch of pack-in game options with it. something has to give because given the current outlook and if I had to chose which one to get all over again it would be the PS3.

I typically don't answer fanboy post, but just in case I've judged you prematurely Eric here's why. MS is moving to or should I say trying to direct consumers into a completely DLC/streaming model. In order for this to work 60g is inadequate. You can't even purchase a 60g to put on an Arcade. 120g is considered the minimum for the offerings on the horizon. They will be offering a 250g HDD next year around the 2nd or 3rd quarter and that should be it until the next console arrives with bigger drives to follow. The Arcade is marketed for one purpose, to steal Nintendo customers. There's really no other reason for it. Cloud Gaming is the buzz word being dropped for the Nextbox and I fully expect Sony to be right on MS heel next go around (forget 10 year lifespan). Sony won't get caught with their pants down twice it cost them dearly this gen. Be ready to upgrade your internet service, you can't get decent HD gaming unless you can stream 5 Mbps, but the again Blu Rays will be dirt cheap by then so you can still enjoy if you want to stick to disc.

@Cordero - there is no validation to me yet that PSN is capable of doing what XBLA does. I have no issues with latency on either network for my needs. For me, it's about content, interface, support, and upgrades. PSN is working hard to compete, finally. But, there's no comparison to what MSFT has in the way of an online hub yet. I hope there wll be sooner than later. I like my PS3 just as much as my 360.

@Victor, so "MS is moving to or should I say trying to direct consumers into a completely DLC/streaming model." I understand that could be their strategy. But that seems like a poor excuse to offer such an under performing and competing price cut and sku(s) against both Sony and Ninendo.

How about they pack in some value at the same time they phase out the 60g. Still, I don't think the rationale you give for the Arcade's existence is a smart one either.

Lastly, why the back handed warning about internet services. I doubt that the option for HD absent the internet will evaporate any time soon. Likely both online and offline HD gaming will be offered. Nobody is going to disconnect the retail revenue stream. Sure it will diminish in market share but it is no where near to being liquidated. I suppose you were giving that a nod via the disc comment: Sony's obvious blu-ray strategy.

"This bundle is weak. The elite can't match the PS3, as such it either needs to be lower priced or have a bunch of pack-in game options with it. something has to give because given the current outlook and if I had to chose which one to get all over again it would be the PS3."

------

Actually they've been offering elite bundles with Halo 3 and Fable II for months now, at the same $399 price point. I would hope they'd have a similar bundle at $299, otherwise this "price cut" is basically an illusion, it's more like they're just cutting the bonuses out of the bundle and lowering the price proportionately.

I don't believe that MS releases sales figures for individual SKUs, do they? If not, it's difficult to know why one model is chosen to stay on the market over the others. If the Arcade SKU is selling better than the others, then that's a pretty good reason to keep it on the market. I also think it's optics - it's assumed to look good to more casual consumers that there's a 360 console available for less than the price of the Wii.

"If you're looking for deep experiences that don't require deep pockets, now is the time to purchase an Xbox 360," claimed Kim.

Incorrect. The time to buy it would be later, after you start bundling in Natal, or it drops price again. X360 owners actually need more deeper pockets seeming it is even price wise with the PS3 but to get ANY of these features they advertise you have to also pick up a monthly subscription to the X360 edition of the internet (no web available). Or if you want HD you have to pick up that cable separately. Or if you don't know how to run LAN cable, you need to pick up Wifi separately. And their fail rate is still 50%...

Personally I think their best option would have been to rebundle the elite (once natal came out, after they fix RROD, and once they allow you to buy your own HDD off newegg or something) into a new name and release it as a NEW console with 100% BC out of the box with X360 games. Then MS would have already started next gen without the competition even remotely being ready for it.

@Steve, The Arcade makes no sense otherwise. Without a HDD the owner can't even download additional content. The marketplace has always had knee-jerk consumers out there who buy things without looking forward and then have to buy more to complete the package in short order. As for your under-performing comment I'm not sure where your going with that unless it's just to be argumentative. I don't have a crystal ball and won't speculate on sales number but I doubt MS will see a decrease in sales because of a price cut. A mix of DLC and Cloud gaming is clearly the next phase I was merely commenting on what it would take to enjoy it in HD, I thought my closing was self explanatory. As I said I don't typically reply to fanboy post, that's why I directed my post to Eric. If you want to engage in an exchange of thoughts and ideas that's fine, but I don't waste my time in console pissing contest because they're irrelevant. Competition is good for everyone.

To Adam1: Well, with the Elite no longer carrying the HDMI cable in it, there's not as much of a difference between it and the Pro. The Pro comes with wireless controllers. And at 50 more for double the HD space, it makes the Pro almost undesirable. The Arcade is now the better option for a cheap alternative, as feature wise it has enough to make it more distinguishable.

I do agree with Adam2 that the better time to buy is after Natal comes out, and the RROD issues get resolved. I just wish they would let the purchasers of the Pro who bought it when it only had a 20GB HDD get a free 60GB. I was a month too soon in my purchase of one.

@Victor: The Arcade and the Elite, IMO, are under performing consoles even with the price cut. They lack basic features, that MS has decided to make pricey options (the hard drive and wireless adapter cost $100 each!). Neither the Arcade or Elite perform reasonably (for the price) in comparison to the PS3 (and the Wii for that matter.)--absent shelling out additional money. I was comparing objective features and components between consoles. The PS3 has more of them for the money. And my point was that no amount of rationalization as to why MS is offering two gimped models (even at a lower price) justifies what amounts to be a poor business decision.

If the rationale for the Arcade (as featureless and pricey as it stands now) is to compete head to head with the Wii, then it is a pretty dumb one. The sales numbers shows that it is an unsuccessful rationale/strategy. So, I would take your comment that "the arcade makes no sense otherwise" and change it to: the arcade just makes no sense.(Especially when you consider the second rationale).

And just how does dropping the 60gb hard drive sku based on the rationale that the future of gaming will be largely dlc, streaming, and cloud computing when the model taking it's place lacks a built in wireless adaptor.

Sure competition is good. Absent the Wii and 360, the PS3 would be priced at $699. And now that it is at $299, the 360 elite should be $299* with the wireless adapter and browser included until it can be re-issued with at least a $250gb hard drive. The arcade should be re-designed with a smaller hard drive and wireless capbablity at $199.

I am not a fanboy and I was just trying to discuss the rationale for phasing out the 60gb and justification of the arcarde. You actually didn't say whether or not it was or not those rationales were justifiable or reasonable on the MS. I happen to think they aren't obvisiously. Perhaps, using the words "under performing" was a poor word choice on my part.

*(or less due to the absence of blu-ray, maybe pack in a premium game or second controller)

I find it strange that the "arcade" version of the XBOX360 does not support XBOX Live Arcade games. There will be plenty of units out there with no decent DLC/XBLA capabilities? HD prices are not that high ..

price war...

c'mon lets start knock'n the change out of these guys, I want to see some cash!

who do you think is gonna get to $99.99 first? I'd talk bets, but that's either ironic or counter productive and I just don't know which...

Now all I want to see is the marketing...

@Adam Flutie
Monthly subscription??!! I don't know where you pulled that from, try yearly. To be honest $1.5 Aus a week aint so bad (so for you Americans it must be roughly 80 cents), cheaper than a WoW subscription that's for certain. Sure it aint free, but meh, I enjoy it, so I'll pay for it.

Also I can't help but figure the silly reports on #2k machines that report a 50% failure rate are outliers or a sample space that's questionable in nature. Considering I'm part of a sizeable XBox LAN community, with every member owning 1-2 boxes for 3 years without a failure among us. It's can't just be luck, a 50% failure rate is so high that at least one or two of those boxes should be dead. I find that Xbox users that complain about RRoD are a vocal minority (albeit a loud one), most of the people who whine about the RRoD issues tend to be PS3 owners, merely trying to trump the 360 owners, it's annoying and juvenile. Statistics like like a 6-8% failure rate (which is still high) would be feasible, but 50% is so absurd that they'd never sell a box, various consumer protection agencies would step in and insist upon a total recall, I mean, can you imagine even a inept buyer actually buying a TV if it had a 1 in 2 chance of not being able to turn on??!!

The arcade IS shite, no doubt, but casual markets like it, and I wouldn't be surprised if many a young mother ends up forking out for the HDD the next christmas/birthday etc. Also Mike is right, XBL walks all over PSN, not necessarily in tech specs, but in community and usability, perhaps with a greater influx of players into the PS3 world that might improve, but meh, xbox is already there.

Ultimately after dealing with the haters, I think the price cuts are remotely meaningless, I mean the HDMI cable cut already accounts for half the drop in price, it's nothing like the major shift the slim brings about, but eh, it's reactionary and at least it's something.

What I just don't get is the phasing out of the Pro. Having a 360 at $250 with a 60GB HDD is more appealing to me than a $300 360 with 120HDD when I can get a PS3 for the same price. One of the biggest advantages the 360 has had was price. Between it and the PS3 it was the only one at $300. Now it is still only $300, and the PS3 has caught up.

Also it seems like people are forgetting that last gen $300 was the launch price, and by this time in a consoles life they were at or under $200. Really by this point the 360 should be in the $200-$250 range. HHDs don't cost that much anymore certainly not enough for the console to still cost $300.

As far as why the Arcade is still around. If it wasn't selling it wouldn't be around.

I have both the PS3 and Xbox360, and the networks are pretty much identical except for the exclusive games to each of course, both of which have some pretty decent ones, and the only thing PSN is really missing is cross game chat. Cross game chat or party chat isn't a big deal to me since I rarely chat while playing online anyway.

I don't really agree with paying for Live though since the service itself helps MS as much or more than it helps the consumer. I mean imagine if everyone on Xbox Live said they weren't going to pay for Xbox Live anymore, do you think MS would just shut it down? No, they need Xbox Live just for the ability to say "we have Xbox Live" to increase the perceived value of their console and brand name, and to sell all their DLC, games, and movies. It just seems kind of wrong to pay for something that would be around even if you didn't pay for it, ya know what I mean? It isn't like an MMORPG that depends on those subscriptions to exist, Live has a very definitive purpose other than just gaining and keeping subscribers.

@Christopher - "Monthly subscription??!! I don't know where you pulled that from, try yearly. "

well, last I checked you could buy it yearly or monthly... For me, I bounce around genres every few months so that I don't have a reason to have a yearly one. What good does Xbox Live give me when I'm playing Mass Effect or another RPG? nothing. And I play those types of games exclusively at least 6 out of the 12 months... Month to month saves me more money.

Most of the time I just don't renew at all even when playing a game that should be 'multiplayer' - why? Friends list is small (because I don't play online a lot) and the few times I have got on has been filled with talk and players that ruin the fun. Xlive might be a selling point for some, but its cost is a huge deterrent for more I would think. I would love to see MS get a better tiered system for Live.

"I mean, can you imagine even a inept buyer actually buying a TV if it had a 1 in 2 chance of not being able to turn on??!!" - First it isn't an initial out of the box failure. It shows up after you play it 6 months to a year. And it isn't that bad for every type of gamer, you play your xbox less often and in smaller bursts I bet you get more life out of it.

Still I think the rate is probably over exaggerated, but I'm the opposite of you. Of my gamer friends, the rate seems about right. 1/2 of them have had the problem at least once.

I was under the impression that the only people still without a 360 are the people who don't WANT a 360, who maybe prefer the PS3 instead. People like me...

(before you guys start blasting me with facts, I KNOW that's not entirely true, I'm just leading up to the following point)

A price drop isn't going to make me any more interested in a console with a high rate of complete system failure. Sony has proven their system stability to me over the years, as well as their ability to put out a solid product that stands the test of time. Drop the 360 to $50 and then MAYBE, just MAYBE, I'll think about getting one. But really only to play Gears, Mass Effect, and Left 4 Dead...

Looks like MS read my earlier post. Here is the latest:

"Microsoft Planning a 250GB Xbox 360 Bundle?

All this comes only a day after Amazon Germany posted a listing for a new 360 bundle (again via Kotaku) that similarly comes with a 250GB hard drive, two controllers, and Forza 3.

The Amazon Germany listing has since been removed, but with two different retailers showing the same item, could this really be two separate but coincidental mistakes? When questioned about the Amazon listing, Microsoft told Kotaku that they've "made no such announcement," but of course that doesn't rule out the possibility that they will."

http://www.1up.com/do/newsStory?cId=3175810

Now I'd buy that for a dollar! (Robocop)