Xbox 360 marketing strategy: Microsoft set to overtake Sony?

Following Microsoft’s comments that it expects Xbox 360 manufacturing costs to diminish annually, analysts are speculating that Microsoft’s long term price strategy may include a retail price reduction in an attempt to gain a greater share of the console market currently dominated by Sony’s Playstation 2.

Although Microsoft may consider cutting the price of the Xbox 360 system in the future, it is unlikely that gamers will benefit from drastic price cuts as seen after the original Xbox’s European debut. Xbox 1’s price was slashed by £100 six weeks after launch in Europe due to much lower than expected sales.

However, the Xbox now has a strong fanbase in the UK and Europe, which is expected to boost sales of the Xbox 360 following its December 2005 release.

A main concern for Microsoft may be the Japanese market’s apparent lack of interest in its next generation video games console: a recent poll indicated that only 6% of Japanese consumers were interested in the Xbox 360. Japan’s console market has traditionally been dominated by Sony, but this dominance may be less pronounced with the next generation of video game consoles.

Despite the Japanese market’s initial indifference toward the Xbox 360, IDC video game analyst Schelley Olhava predicts that Microsoft’s marketing strategy will bring results, forecasting an Xbox 360 user base of 40 million units, vs 49 million units for the Sony Playstation 3 by 2009.

Given that these initial projections fall into the same ballpark, we may well see Microsoft succeed in securing the bigger section of the video games market with the Xbox 360 console.

Related:

• Preorder your Xbox 360 here