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08.28.2009 9:39 am

Price cut is last gasp for Xbox 360

St. Louis Post-Dispatch
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Weeks of speculation have come to this: Microsoft is officially reducing the price of its Xbox 360 consoles starting today.

Now, you’ll be able to purchase the higher end, all-black Elite model for $299.99, down from $399.99, and the all-white Pro model for $249.99, down from $299.99. The Pro, however, is being phased out, so the price applies to remaining supplies.

The Arcade model — the one without a hard drive — will stay at $199.99.

Talk of the price cuts began when retail inventory lists leaked showing the lower prices, and big-box sellers Best Buy, Target and Walmart released weekend sales circulars with the new prices included.

This is the third price cut for Elite, which started selling in 2006 for $479.99, and the second for Pro since its arrival last year at $349.99. But this latest reduction for Elite puts it on the same price level as Sony’s PlayStation 3 console.

Microsoft insists its inventory of games and selection of preferred titles is much larger for Xbox 360 than PS3. And with the controller-free gaming experience of Project Natal in the works, Xbox appears poised to be the console of the future.

Until it crashes again.

From the beginning, Xbox has suffered from a long list of problems that include overheating, game-disc scratching, video blackouts, software update issues and complete system failure. Though Microsoft insists it has fixed most of the problems, Xbox remains subject to frequent replacement from breakdowns, and Natal is expected to put even more stress on system performance.

Devoted Xboxers don’t care; they defend their favorite console to the hilt. And those folks on the periphery of interest remained there in part because of the frequent price cuts. But with Xbox and PS3 now similarly priced, the discontented Xbox users who were discouraged from switching due to PS3’s higher cost lose that excuse.

Meanwhile, the durable PS3 keeps plugging along with an overall system failure rate far below that of Xbox 360’s estimated 30 percent to 50 percent.

Microsoft has replaced failed systems for free but has taken a month to do so, compared to Sony’s average replacement time of a week. And a replaced PS3 isn’t likely to crash in a couple of months as reconditioned Xboxes do.

If Microsoft won’t redesign Xbox or replace it with a newer model, we can expect the hardware failures to continue and price cuts to become the last incentive for people to purchase the console. That is until Microsoft decides it has lost too much money and credibility beating a dead horse.

16 comments

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This article is spot on!! The 360 is a great machine on paper and when it works. However, the failure rate is way to high. I fear the only way Microsoft will wake up, is when a class action suit is thrust upon the giant. I have always liked the fact that Microsoft stands behind their products by offering a good policy of trying to take care of customers. But, in this case you would think someone over there would wake-up and fix these issues once and for all. These issues have been around for far too long. And, Microsoft should take note that in the future people will not purchase their hardware products for fear of faulty design.

— Tim
10:57 am August 28th, 2009

Umm, the 360 has been redesigned a couple of times. The original chipset was called Xenon (vast majority of 360 failures happen with this chipset). There was an interim chipset (Zephyr) that added some epoxy glue to the GPU and HDMI for Elites. And then the Falcon chipset was introduced that reduced the CPU size to 65nm from 90nm and made HDMI standard for all versions of the 360. It was here that the 360 failure rates started improving but they were still happening in the 10% plus range.

Then last fall, the Jasper version of the 360 started hitting shelves which featured a 65nm CPU and GPU, on-board flash memory, and a power consumption drop to 100w. Jasper reliability is more than likely within industry norms. It is cool, relatively quiet (DVD drive is still primary source of noise) and dependable.

Another update to the 360 is likely coming next year around the time of the Natal release. This update will supposedly put both the CPU and GPU on the same 45nm chip. That will result in a huge power and heat reduction in the 360.

So yes, Mr. Sheets. The 360 has been receiving hardware redesigns and will continue to receive hardware redesigns. Which pretty much invalidates the main thrust of your post.

And for the record, I’m not a 360 fanboy. I own a 360 and a Wii and would have a PS3 in the house if my wife wouldn’t leave me over it. :) But, I’m still trying to get one anyway. I also contend that the 360 Elite should be priced at $249.99 because it doesn’t stack up value-wise to the PS3 at $299.99 because of no Blu-Ray drive and no built-in WiFi. Also, yes, the 360 accessories (WiFi adapter, HDD) are still horrendously overpriced.

— Scott
11:36 am August 28th, 2009

I’m no fanboy (the PC is my gaming platform of choice), but this is a ridiculous article. Failure rates of 30 to 50 percent? Show me some numbers.

I have had a 360 for three years. I have played it into the ground (mostly Rock Band and Guitar Hero, but plenty of other games.) It has never failed. It scratched a game disc once when I was stupid enough to move it while the disc was spinning, but I grabbed a cheap CD resurfacer from Memorex that solved the problem.

Granted, I am just one user. But this article seems to paint the 360 as the underdog when it has clearly been the PS3 that has struggled in the marketplace.

— Dave
12:04 pm August 28th, 2009

I’m always wary of articles that quote fuzzy statistics without any reference to their source. Where are these failure rate and replacement time estimates coming from? Scott has already pointed out blaring inaccuracies in your article regarding 360 hardware changes.

— Gaines Kergosien
12:04 pm August 28th, 2009

I had my xbox serviced last week for an E74 error. It was mailed from Nashville to Dallas via UPS on a Monday and returned 8 days later on a Tuesday. The console was out of warranty but they didn’t charge for the repair or postage. The irony was that it died exactly two years to the day it was assembled. But, the point is, it didn’t take a “month” to repair. That’s either old news or an extreme exaggeration.

— Chris
12:15 pm August 28th, 2009

Here is a source: http://www.gamedaily.com/articles/news/report-xbox-360-failure-rate-was-as-high-as-68/?biz=1

I am no fan-boy!! But, I had two units do this and, yes one was the new chipset. So, I hope Microsoft gets their act together.

— Tim
12:22 pm August 28th, 2009

Despite his numerous attempts over the past four years, David Sheets has unsuccessfully pursued this line of logic that the 360 is and always was a failure. Sorry but even with the price-drop, the Slim model, and the Blu-Ray, Sony faces an uphill battle against a robust game catalogue and an undeniable better online gaming experience. However, Sony will get its fair share of the market eventually, despite its past suicidal business decisions and insulting beginning PS3 prices. Its too bad the “Gameguy” is more concerned with promoting the PS3 over the 360, when he should be concerned with promoting good games in general, which both systems have many of. Hopefully, most true gamers realize the pros and cons of both system, and that both have some truly well-developed games. Fanboy Sheets is a PS3 mark/schill.

— enough
1:54 pm August 28th, 2009

I dont think this guy actually knows anything about gaming. Not the tech side or the culture of it. The Post might as well have Bernie Miklasz write these “gaming” articles. At least he knows about writing.

— B
2:04 pm August 28th, 2009

Just FYI, the 50% number that Mr. Sheets is referencing comes from a Game Informer survey of 360 owners. While surveys like this are fun and make for good articles, they are rarely if ever statistically accurate. This survey also fails to take into account the different revisions of the 360 so new purchasers of new 360s (Jasper version with 65nm CPU & GPU) will not experience anywhere near that rate of failure.

The 30% rate of failure is probably more accurate for launch 360s (Xenons) as that number was confirmed a couple of years ago by retailers.

— Scott
2:52 pm August 28th, 2009

Let me rephrase that…The Game Informer survey wasn’t sent out just to 360 owners but all magazine subscribers. So, you can see where a survey like this could be abused. There’s also the problem of those that have had 360s fail would be more likely to respond than those who did not.

— Scott
3:01 pm August 28th, 2009

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