Bond
04-29-2002, 07:38 PM
http://australianit.news.com.au/articles/0,7204,4221717%5E15306%5E%5Enbv%5E,00.html
MICROSOFT's aggressive price cut to Xbox is paying dividends, with retailers reporting "unbelievable" sales of Xbox at the weekend.
The Xbox launched in March at $649 but sluggish sales in the first month forced the technology giant to slash the price of the Xbox by 40 per cent.
Friday was the first day that the console cost $399 and retailers say the new price is a winner.
John Redenbach, Toys R Us merchandise director, said sales of Xbox on Friday and Saturday were 2.5 times the entire launch week.
"Unbelievable, unbelievable, unbelievable," he said. "We were surprised - we thought it would be good, but it was spectacular."
Toys R Us took reservations from customers in the week leading up to the price - counting for 25 per cent of sales at the weekend, while the rest were from people walking in off the street.
Independent sales figures are not due until Thursday, but other retailers describe a similar boost in sales.
Steve Wilson, marketing director for Electronics Boutique, said "it was almost like launch all over again".
He estimated the chain did about 60-70 per cent of the sales it did at launch, but he was unsure if it would stay strong.
"That's the several million dollar question," Mr Wilson said.
"It's no secret sales previously weren't staying strong, but whether they've now tapped into a wider market, I don't know."
Independent figures show Xbox was outsold three to one by its rival Sony PlayStation 2 in the two weeks before Microsoft bowed to economic pressure and announced the discount.
Microsoft had predicted it would sell 100,000 consoles in the first three months but was on track to reach just 30,000 before the price cut.
The Xbox is now $100 cheaper than the PS2 at $499 but Sony maintains it will not be caught in a price war.
The dynamic will shift again when Nintendo launches its GameCube console on May 17. The GameCube was originally priced at $399 but Microsoft's move forced Nintendo to drop the price to $329 before the console was even launched.
Mr Wilson said history indicated the market could not support three competing consoles.
"Someone will lose," he said. "I don't think there's room for three players, but I'm happy to be proved wrong."
In the previous console wars, the original Sony PlayStation and the Nintendo 64 knocked out the Sega Saturn. Sega developed a new console, the Dreamcast, but early last year the company conceded defeat and abandoned the hardware game to focus on games development.
MICROSOFT's aggressive price cut to Xbox is paying dividends, with retailers reporting "unbelievable" sales of Xbox at the weekend.
The Xbox launched in March at $649 but sluggish sales in the first month forced the technology giant to slash the price of the Xbox by 40 per cent.
Friday was the first day that the console cost $399 and retailers say the new price is a winner.
John Redenbach, Toys R Us merchandise director, said sales of Xbox on Friday and Saturday were 2.5 times the entire launch week.
"Unbelievable, unbelievable, unbelievable," he said. "We were surprised - we thought it would be good, but it was spectacular."
Toys R Us took reservations from customers in the week leading up to the price - counting for 25 per cent of sales at the weekend, while the rest were from people walking in off the street.
Independent sales figures are not due until Thursday, but other retailers describe a similar boost in sales.
Steve Wilson, marketing director for Electronics Boutique, said "it was almost like launch all over again".
He estimated the chain did about 60-70 per cent of the sales it did at launch, but he was unsure if it would stay strong.
"That's the several million dollar question," Mr Wilson said.
"It's no secret sales previously weren't staying strong, but whether they've now tapped into a wider market, I don't know."
Independent figures show Xbox was outsold three to one by its rival Sony PlayStation 2 in the two weeks before Microsoft bowed to economic pressure and announced the discount.
Microsoft had predicted it would sell 100,000 consoles in the first three months but was on track to reach just 30,000 before the price cut.
The Xbox is now $100 cheaper than the PS2 at $499 but Sony maintains it will not be caught in a price war.
The dynamic will shift again when Nintendo launches its GameCube console on May 17. The GameCube was originally priced at $399 but Microsoft's move forced Nintendo to drop the price to $329 before the console was even launched.
Mr Wilson said history indicated the market could not support three competing consoles.
"Someone will lose," he said. "I don't think there's room for three players, but I'm happy to be proved wrong."
In the previous console wars, the original Sony PlayStation and the Nintendo 64 knocked out the Sega Saturn. Sega developed a new console, the Dreamcast, but early last year the company conceded defeat and abandoned the hardware game to focus on games development.