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Microsoft to build 17,000 Xboxes a week in Brazil

New deal will allow for around 40% reduction to local retail cost

Microsoft has extended an existing deal with Flextronics Inc. to begin manufacturing 17,000 Xboxes a week in Brazil, allowing the units to be sold more cheaply in the territory.

Flextronics currently manufactures the publishers machines in China, but the new deal will allow Microsoft to reduce Brazilian retail prices for the units by around 40 per cent, meaning that a 4GB Xbox 360 will cost R$799 (£281) while a 350GB slim with Kinect wil cost R$1399 (£492), reports Techtudo.

Whilst those prices are still high, especially given the realtive poverty of the region, manfacturing the units in Brazil itself avoids the country's punative import taxes, which would other render hardware almost uniformly too expensive.

Alongside the hardware price reduction, Microsoft is also lowering the retail cost of Xbox LIVE Gold membership and points and producing freshly localised versions of various brand new titles. Both Sony and Microsoft have made some inroads into developing the market, which should offer a chance to extend console lifecycles considerably.

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Dan Pearson