360 price cuts not a reaction to flagging sales - Ballmer

Xbox business is an "unqualified success," says chief executive

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.

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Latest comments (1)

Mat Bettinson Business Development Manager, Tantalus Media13 years ago
Absolutely. Pure coincidence the company decides to drop several billion dollars in further loss leading the cost of manufacture and initiates a massive advertising campaign right across a region that just happens to be the same region they were experiencing flagging market share.

Craziest thing I've ever heard anyone say too Stevie!

Next week's European hardware sales data will be telling. It'll be very interesting to see whether the upturn is sustainable or whether PS3 will regain top position. If you look at the US response to a price cut and translate that across, it looks like it might be a close run thing.
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