Starting on September 5th, 2008 Microsoft will officially start selling their xbox 360 consoles at a $50 price decrease. The prices are as follows:

Xbox 360 Arcade $199
Xbox 360 Pro (60gb HD) $299
Xbox 360 Elite (120gb HD, Black) $399

What does this really mean? Well, the console with the largest gaming selection and best online play is now also the cheapest. (The Arcade’s $199 price point compared to the $250 Nintendo Wii) At these lower prices, more people have an opportunity to jump in and play. I think this move is perfect for Microsoft. They now have the opportunity to draw in casual gamers and sell consoles to people upgrading from the previous generation. Even hard-core gamers who can’t afford a $400 system or don’t want to play party games all day, now have an option to frag their friends in halo 3 or slice them in half with gears of war all that a reasonable price.

This move is really tough on Nintendo. No longer is their console the cheapest and therefore casual gamers now have another option. When those people walk into a gaming store or their local big-box chain, they have the choice for a more powerful and cheaper console with a larger gaming selection to boot. People are still flocking to the Wii so it’s not a huge threat at this time, but it is something Nintendo needs to keep their eyes on.

As for the prices of the other consoles, I don’t foresee an immediate response. The Nintendo Wii, which is still in high-demand, is consistently outselling the competition. The PlayStation 3 is also selling well and has some great exclusives in the works. However, I think by the holiday season both companies will bight the bullet and lower their prices too. Honestly, this is great for the consumer whether you want a 360 or not.

Source