into a console price war. With price cuts of 30% and more, they both appear to be trying to make their money on higher volumes. What I can't figure though is how this benefits MSFT. Since they stated that they are losing serious money on the sale of each game console, even at the $299 price, what effect is selling the XBOX at $199 going to have? If MSFT had a strong game lineup, they could make the money back on the sale of software. Since they presently are lacking such a presence in the game sector, what is the strategy behind their actions/ This should prove to be very interesting. Oh well, I can only see it as a boost for the gamers like AKLM. Good games will still command solid prices, and game companies such as AKLM may draw the attention of the big players in the industry.
MSFT has far bigger plans for XBox than a gaming platform. It will eventually replace the PC in the home. It will be a platform from which MSFT apps can be downloaded and used on a per/time or subscription basis. MSFT just wants the platform in every home... even if they have to give it away! Get them used to the XBox brand and they will keep coming back to buy upgrades as MSFT transforms this platform into the home PC replacement.