Following a posting of a Circuit City flyer by our friends at Joystiq, GameDaily BIZ spoke to a high-level retail source (not at Circuit City) who did indeed confirm that the prices in the Circuit City flyer were correct and that the price reduction will be retail wide.Effective August 12, the pro 20GB model will be slashed by $50 to $349.99. The elite 120GB SKU will receive a $30 cut bringing its price to $449.99 and the core SKU will get a price cut of just $20, making its MSRP $279.99.
The pro model at Circuit City also bundles in a copy of Rockstar's Table Tennis, but our source did not know anything about that, suggesting to us that the Table Tennis deal is specific to Circuit City.
A strong rumor has persisted that Microsoft will phase out the core SKU in the near future, but our source has not heard anything from Microsoft on that issue. And if Microsoft did want to phase out the core model, why not extend the $50 cut to it as well to align it with the Wii's price and to help clear inventory?
GameDaily BIZ has contacted Microsoft for official comment and will update when we hear back.
[UPDATE] GameDaily BIZ has now been issued the exact same Microsoft response that was given to The Hollywood Reporter earlier this month: "We have no announcements to make on pricing at this time. While price matters, content is king. And no other system is offering all the games people want to play this holiday at a better price than Xbox 360."
[UPDATE 2] We quickly dropped a line to Wedbush Morgan Securities analyst Michael Pachter to get his take on this price drop strategy. He said it "speaks volumes about the cost of production." Pachter believes that Microsoft is probably breakeven on the Pro SKU - he thinks the cost on the Pro is right around $325. He also thinks they make a little money on the Elite, but lose a little on the Core, which is why they only dropped it by $20.
by James Brightman
source:gamedaily.com
