Retail expects huge demand for Xbox 360 following price cut

High Street retailers have praised Microsoft for reducing the price of the Xbox 360 before the busy Christmas sales period.

Speaking to GamesIndustry.biz on the eve of the price cuts, GAME, HMV, Woolworths and independent stores have all agreed that the system now appeals to a much wider range of consumers.

"The timing is excellent, and we'll work closely with Microsoft to give customers all the product and advice they need in the run up to Christmas," offered Tricia Brennan, MD of Game UK.

"This is great news for our customers. With these new price points and the wide variety of mass market and core games in the pipeline, the 360 is appealing to a wider range of customers than ever before."

Woolworths – the retail group that was controversially linked with leaked news of price cuts before Microsoft made any official announcement – summed up the latest offer: "Lower prices are good news for our customers and good news for sales. The new Xbox 360 price points will generate a huge amount of interest in the console and its software."

HMV Games' commercial manager Jonathan Hayes hopes the system will be able to repeat the sales success of last year, when the console flew off shelves with the release of Halo 3.

"Naturally, we expect the drop in price to create further demand for the product and to drive sales," he said. "Having offered such a great deal with Halo 3 last year, part of Microsoft's thinking this year must be to see how they can create another compelling offer in the run up to Christmas."

Steve O'Brien, of respected indie stores Action Replay and Gameshop, believes that the gap in price between the 360 and Sony's PlayStation 3 puts Microsoft's console at a distinct advantage.

"In the current economic climate I'd expect the 360 to take full advantage of a Christmas which will be tough on cash-strapped consumers. I think there is sufficient light between the two price points now for 360 to steal a significant percentage of the undecided market and that will undoubtedly impact on Sony's sales," he said.

However, HMVs Hayes believes that both machines are distinctive enough to appeal to different consumers without eating into each other's sales.

"The truth is that they are essentially two different products, with their own particular special features, such as Blu-ray in the case of the PS3," offered Hayes.

"And, of course, both consoles will have games that are exclusive to them, so, while both consoles need to be competitively priced and to offer value to customers, they each hold their own particular appeal," he added.

The latest cuts come only six months after the last European price reduction, but retailers believe it's not yet time to worry that the market is being devalued by suggesting to consumers that all home consoles should be priced low.

"I think prematurely devaluing the market is a danger, but the reality is the economic down turn is not going to go away tomorrow so anything which combats the rising prices of living helps the entertainment market as a whole and we'll see the benefits of this price cut way into 2009 reflecting in software sales," offered O'Brien.

Hayes added: "For some consumers - perhaps a parent buying a gift for a child, it may well come down to price - if that's the only consideration for them, but I'd say most consumers, certainly gamers, know that they are, ultimately, paying for different types of products, both of which will offer them a unique playing experience."

From tomorrow, the Arcade Xbox 360 will be priced at GBP 129.99, while the Premium unit will sell for 169.99 and the Elite for GBP 229.99.