SEPT. 22, 2009 • Although no reason was provided, Netflix is sponsoring a $50 mail-in rebate for purchases of Xbox 360 Elites between Sept. 22 and Oct. 5. Although Microsoft did recently reduced the system to $299, the previously included HDMI cable was eliminated. Most mainstream retailers sell the cable from between $30 and $50.

Impact: The $50 rebate was a quiet promotion that effectively reduced the price of the Xbox 360 to $249 for a two-week period. Sony has offered a similar rebate of $100 to PlayStation 3 purchasers that applied for a Sony Visa card. There is clearly a price war going on and sponsored rebates may be a way to offer consumers value without the immediate loss that an actual price drop entails. Microsoft has already had to cut several corners to get the price to $299. It is unclear how many people realize that the Xbox 360 no longer ships with an HDMI cable. This was one tactic to get the price down. The PlayStation 3 does not have an HDMI cable so it really is not a big difference. However, both Sony and Microsoft are losing money from their game business and every penny saved makes a big difference.