SAN FRANCISCO — Microsoft Corp. has cut the price of its top-end Xbox 360 gaming console by $100, matching a similar move by arch-rival Sony Corp. just last week.
In a statement Thursday morning, Microsoft said it has reduced the price of its Xbox 360 Elite to $299. The move brings the console in line with the comparable PlayStation 3, on which Sony cut its price by $100 at an industry conference in Germany last week.
Microsoft also trimmed the price on its 20GB Xbox 360 Pro by $50, as an effort to clear out remaining consoles before discontinuing the product. The basic Xbox 360 Arcade version will remain at $199.
The move came as little surprise, as the video game industry is dealing with a 5-month-long sales slump. Most of this year’s hot titles are slated for release in the holiday shopping season, so analysts widely expected console makers to trim their prices to stoke demand.
“We view the Xbox price cut as a proactive measure to maintain market share and boost momentum ahead of the key second half selling period,” wrote Colin Sebastian of Lazard Capital Markets in a note to clients.
Sebastian also notes that Microsoft’s move comes just weeks before the planned release of “Halo ODST”—the next sequel to its blockbuster game franchise that is exclusive to the console.
“We expect that the combined impact of lower prices on PS3 and Xbox 360 hardware will drive incremental unit sales in the near term, while a sustained recovery is more dependent on the popularity of upcoming key titles such as ‘Halo,’ ‘Assassin’s Creed’ and ‘Call of Duty.”’
Nintendo is the only console maker not to have reduced prices. The Wii has been the most popular of the next-generation consoles, but sales have seriously slowed over the last few months, leaving some analysts to speculate about a future price cut.
The Wii still sells at its original $250 price tag.
“At this point, while we do not rule out the possibility of a Wii price cut, we believe Nintendo is more likely to offer promotional bundles,” Sebastian wrote.
Arvind Bhatia of Sterne Agee said he does expect a reduction from Nintendo, possibly pushing the Wii to $199.
“Overall, in our opinion, these hardware price cuts are much needed and we are hopeful it will provide a boost to hardware and software sales this Christmas,” Bhatia wrote in a note to clients.
Sales of video game hardware and software have been in a downspin for the last five months. The slowing economy and difficult comparisons with early 2008 have made it difficult for the sector to show sales growth this year.
According to data from the NPD Group, total industry sales for hardware and software in the United States for the month of July were down 29 percent from the same month the previous year.
Year-to-date sales totaled $8.16 billion by the end of July — down 14 percent from the $9.49 billion in sales for the same period last year.