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Xbox Price Drops to $199.99 U.S.

15 May, 2002 By: Holly J. Wagner

Just hours after Sony Computer Entertainment announced a North American price drop for its Playstation consoles, Microsoft has fired a return salvo in the game console price wars by dropping the United States price on the Xbox console from $299.99 to $199.99 ($299.99 CAN).

The company also reduced the console's price in Japan to 24,800 yen from 34,800 yen in Japan effective May 22.

“The traditional forum for making an announcement of this magnitude is the Electronic Entertainment Expo (E3) next week, but we've been ready to go for some time and can easily put this in place at retail now,” said John O'Rourke, director of worldwide Xbox marketing at Microsoft. “We see no reason why eager gamers should have to wait a week to benefit from this tremendous value opportunity."

As the battle for market share heats up, Microsoft Corp. enlisted participation from key retailers and third-party publishers to support a multimillion dollar national merchandising and marketing campaign set to begin this weekend.

“As part of our long-term strategy to broaden the reach of Xbox and make it accessible to more consumers, we've been working for several weeks with our key partners to make this announcement as seamless and high impact as possible," O'Rourke said. "This new, lower price makes Xbox the best value among all competing video game systems. The best box is now the best value."

In the six months since its highly successful North American launch, Xbox is experiencing a software attach rate of 4.1 in North America and recent momentum in Europe and Australia demonstrates strong consumer demand for Xbox, the company reported.

“Xbox has been working closely with us to roll out this new pricing. We're confident the planned marketing and promotional support behind it will really drive store traffic and bring Xbox to the attention of a lot more gamers," said Dan DeMatteo, president of GameStop.

Microsoft currently expects to ship 3.5 million to 4 million Xbox consoles for the fiscal year ending June 30.

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