AUG. 7, 2007 • Although it had been expected that Microsoft Games would announce a price reduction for the Xbox 360 at E3 in July, the decision was finally made nearly a month later. Effective immediately, the Xbox 360 Pro was reduced from $399 to $349; the Core model dropped to $279 from $299, and the Elite shed $50 to a new MSRP of $449. The price of the units HD-DVD player add-on was reduced $20 to $179 in July. Sony Computer Entertainment cut $100 off the $599 list for its inventory of 60GB PlayStation 3s during E3. A week later, Microsoft dropped the MSRP of the Xbox 360 Pro in Australia from $649 to $579.95 in Australia. The Core model was reduced to $399.95 from $499.95. The Wii also sells for $399 in Australia. Ten days later in Europe, Microsoft lowered the Pro to €349.99 from €399.99, and the Core to €279.99 from €299.99. The division also announced that it was shipping its Elite model in Europe for €449.99.

Impact: Sales for the Xbox 360 have been tepid and the modest price cuts may help some. However, with a confusing price range from $280 to $450 PLUS the potential need for add-ons like an HD-DVD player ($180), Wi-Fi adaptor ($100) and an Xbox Live Gold membership (about $50/year) the Xbox 360 is in danger of looking like some Rube Goldberg device.