Recently Microsoft announced an official price cut across their Xbox 360 SKU's, while MS themselves claimed it was a positive action as they held on for so long without price cutting, a marketer has come forward to say that the price has a number of downsides. Firstly it implies the product is losing added value, it indicates to competitors that sales are not as good as expected, MS has to compensate for the retail stock and suggest a new product is coming soon. One could easily argue that all of these points are applicable to the Xbox 360, and that with Halo 3 and the introduction of the Elite, was the price cut kicked in at the WRONG time by MS?

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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.