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Xbox 360 Price Dropped To Attract Casual Gamers

Microsoft believes that making the Xbox 360 Arcade cheaper than the Wii will attract more casual gamers.
"History shows that £159 is the price point where a console's audience begins to expand," said Chris Lewis, vice president of Microsoft's interactive entertainment division in Europe. "It does now give us much broader appeal. We do have much more mass market content, with more casual titles. This opens up that space even more broadly."

The price reductions, which take effect Friday, will see the Arcade drop from £199.99 to £159.99, while the Xbox 360 Premium, which has a 20GB hard drive, will cost £199.99 instead of £249.99, and the Xbox 360 Elite with 120GB hard drive, will retail for £259.99 rather than £299.99.

Microsoft also defended its decision to back the HD-DVD format. HD-DVD recently lost out to Blu-ray in the format war (see Toshiba Drops HD DVD, Will It Affect Xbox 360?), and Microsoft was forced to announce that it would no longer be producing the external HD-DVD player for the Xbox 360 (see Microsoft Drops HD DVD Production, And Drops HD DVD Player Price.

"At the time, our view was that the right roll of the dice for us was around HD-DVD," says Lewis. "But we wanted to give our consumers a choice. We didnt want to force anyone down a particular route as regards DVD playback.

"From the outset we said that the 360 is at its heart an online, broad-appeal gaming platform. My view now is that the future is very much around the role of digital downloads," he added.

"Europe is undoubtedly our critical geography in our worldwide aspiration to be market leaders," said Lewis.

"We're enjoying fantastic success in North America, we're having a great time in Europe, but we aspire to do even more." He re-iterated Microsoft's commitment to the platform, quashing suggestions that the price drop on the Xbox 360 was a tactic to clear the way for a new games console.

He also declined to comment on persistent rumours that Microsoft could be working on a handheld games console to rival Sony's PlayStation Portable, and Nintendo's wildly popular DS. "For now, we've got nothing to announce or respond to regarding any speculation about what we're doing in the handheld space," said Lewis.
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