Summary
What could have motivated Microsoft to cut the price of their X Box?
Analysis
As a marketer, the last thing you tell your management to do is to cut price of your product. Despite the expected generated sales increase, it might generate more downsides that expected:
- Your product is losing added value
- You give the market a signal your sales might not be as good as expected
- You have to compensate for the retail stock
- It might announce a new product coming soon
In addition to those points, the timing of such a price cut is extremely critical. While some of us could agree a price cut for the back to school season is a good idea, some others will argue it was not needed because of the future Halo 3 release and the recent Elite version announcement.
Cutting the xBox prices drives more negative attention than expected. Sony PS3 is still more expensive and suffering from sales issues and Nintendo Wii still leads the market. This price cut will not have a significant impact to change it.
Maybe should we understand that the Elite sales are lower than expected...
