The recent round of price cuts for the Xbox 360 is not a reaction to slowing sales for the home console, according to Microsoft's Steve Ballmer.
Speaking to the Mercury News, the chief executive said the Xbox business is an unqualified success, with the console continuing to sell well.
"That's the craziest thing I've ever heard anybody say," offered Ballmer when asked whether price reductions were evidence that Microsoft had run out of ideas to boost hardware sales. "All consoles start at higher prices. They always come down through the long cycle."
Although Microsoft has now cut the price of the hardware twice in one year, raising questions about offering lower prices within six months of each other, Ballmer said pricing strategies are never discussed outside of the company.
"Price is not something you discuss externally. Nobody ever does. So, whether we were planning on cutting price the next day or in six months or a year, we're not going to discuss price changes. If you ask me, Xbox Live is going gangbusters. The console is selling well."
He added: "I certainly would say the work that we've done around Xbox is an unqualified success. No question about that. The product is selling very well. The Xbox is an absolute home run."
Following last month's price cuts, the Xbox 360 has sold over six million sales in Europe.