Heather Bellini, an analyst from UBS AG, claims Microsoft may announce a Xbox 360 price cut within a couple of months to boost sales:
Microsoft loses money on every Xbox it sells, said UBS AG analyst Heather Bellini in New York. In the fiscal year that ended June 30, the unit that sells the console lost $1.26 billion on sales of $4.26 billion. Microsoft says the division, which accounted for 9.6 percent of total sales last year, will be profitable in the year that starts July 1.
That may mean a price cut heading into the holiday season to spur sales of games, which do make a profit, Bellini said. Microsoft declined to comment on whether the console loses money.
``We are well aware that the sweet spot of the market is really 199 bucks,'' said David Hufford, a director of Xbox product management. Sony sold 75 million PlayStation 2s at or below that price.
Wii costs $250 and makes a ``strong value proposition,'' Hufford said. ``When mom walks into the store and sees she can get a console with a game for $250, she sees it as a $300 value. They've done a good job.''
He declined to say whether Microsoft will reduce the Xbox's price.