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Xbox 360 (Xbox 360)
at 7:30PM PST on July 12, 2007.
if Microsoft just assumed an economic loss of
, why do you expect a significant price drop?
Think about what that would mean for Microsoft. According to your prediction of 60 million units, Microsoft is going to sell 50 million more. If they lower the price on all Xbox 360s by $100 (which I would consider a significant price drop), they are losing $100 x 50 million =
. That's almost a tenth of Bill Gates' net worth. These are big numbers, and Microsoft is selling products in order to make a profit, not to post higher unit sales than the PS3 or Wii.
Of course they're not going to sell Xbox 360s at their current prices forever, but if they wait until they've sold 20 million, they've earned another
relative to cutting the price now. I'm not sure how long they'll wait, but they're avoiding losses of about $16 million for every month they push a price cut back. This number will increase quite a bit during the upcoming holiday season (which will be the biggest yet according to Microsoft's press conference).
I cannot imagine anyone at Microsoft deciding that selling their consoles at further loss would be a good idea, especially in light of their announcement last week. For this reason, I think
a prediction of 60 million Xbox 360 sales depending on a significant price drop should be revised downward.
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