Microsoft officially announces cheaper Xbox 360s

On Sunday, Microsoft officially announced the $50 price reduction to the 20 GB Xbox 360 for the US, as well as the introduction of a 60 GB model at the $349 price position.

Employees of several consumer electronics retailers provided corroborative leaks last week, showing sales circulars advertising the Microsoft console's price reduction.

Game Crazy, a retailer who didn't have any information leak prematurely, announced today its promotional tie-in to Microsoft's announcement. On July 19, it will be giving away 299 free Xbox 360s at its various store locations. To let customers know where they can get one, the retailer has set up a room in Google's new Lively 3D virtual world.


By improving the per-dollar value of the 360, Microsoft stands to capitalize on the system's record high software attach rate. The Xbox 360 has consistently led in this category, which has only increased with subsequent software releases. In 2005, four 360 games were sold for every console, and in 2006 it reached five, in 2007 it hovered at just about five and-a-half.

This year, the software attach rate jumped to seven, and by April had already gone up to 7.5. Nintendo's top-selling Wii console has only just reached an attach rate of 5.3, a rank that Microsoft's console had at the beginning of last year; Sony's PlayStation 3 has around 4.6.

Availability of the "improved" 360s is slated for early August in the United States and Canada. Similar price cuts were instituted in Australia weeks before they were expected in the US, but related sales figures have not yet been published.

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