Will Microsoft Reduce the Price of its Xbox 360?

After Sony Corporation reduced the price of its PlayStation 3 system, rumors swirled that Microsoft was to make a similar move with its Xbox 360 price tags.

Lower prices were the talk of the town at the recent Electronic Entertainment Expo (E3) videogame trade show.

Nintendo's Wii console, which now outsells its competitors, is allegedly what provoked Sony's price cut. As the PlayStation 3 quickly fell far behind its rivals, Sony dropped the system's price from $599 to $499.

Many were led to believe that a price cut would happen for Microsoft because the company's profits experienced a decrease this year. "Microsoft's Entertainment and Devices division, which includes the Xbox 360 and Zune portable music player, reported revenue of $929 million in the third quarter, down from $1.18 billion a year ago." In an attempt to defend itself, Microsoft stressed that the division will be profitable for the fiscal year. (Source: marketwatch.com)

Others are convinced that Microsoft will have to lower the cost of its console in order to compete with Nintendo's Wii. Now that Sony has changed its own pricing structure, the PS3 and an internal Blu-ray player are now also breathing down the neck of the Xbox 360.

Regardless of rumors and assumptions, Microsoft is now saying that Xbox 360 price tags will not be altered. The company has confidence that its future products will increase income, stating, "Companies typically lose money on the consoles they sell, and make back those profits on the game side. The company is expected to push a strong line up of games consisting of marquee title 'Halo 3,' as well as the latest 'Grand Theft Auto' and 'Madden' football games." (Source: money.cnn.com)

Until Sony crafts something better than Blu-ray for its PlayStation 3, don't expect Microsoft to punch the panic button.