Microsoft Unveils Xbox Pricing

The software giant will offer a fully loaded console for $400 and a stripped-down one for $300.
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Microsoft

(MSFT) - Get Report

on Wednesday announced its pricing forthe upcoming Xbox 360 video game console.

The company will offer two versions of the console. The fully loaded model, which includes a 20GB hard disk drive, wireless game controllers, a remote control and a high-definition television connector, will be offered for about $400 in the U.S. The company will charge about $300 for a stripped-down version that doesn't include a hard drive and comes with only a standard definition connector. The units will be priced slightly higher in Europe, about 400 euros (or about $495) for the fully loaded unit and 300 euros for the stripped-down model.

Although Microsoft plans to launch the device this fall at aboutthe same time as in Europe, the U.S. and Japan, it did notimmediately give the price for the Japanese version of the console. Thecompany said that it would offer more details on the Japanese launch atthe Tokyo Game Show next month.

Microsoft priced the original Xbox console at $299 in the U.S. when it released the device in 2001. As chief rival

Sony

(SNE) - Get Report

hasdone with the market leading PlayStation 2, Microsoft has cut its priceon the console in recent years so that it is now selling for about$150.

Sony, which plans to launch its own next-generation console, thePlayStation 3, in the spring, has not yet disclosed pricing for thedevice.

Microsoft has run a distant second to Sony in market share on thecurrent generation of consoles. But the company has been determined tocut Sony's lead this time around. Last time, Microsoftlaunched its console a year after Sony's; this time it will offer thefirst next-generation platform. And like Sony, the company is promisingto include a host of multimedia functions within the device,envisioning it not just as a game console but as a multimedia hub.

It remains to be seen how well consumers will buy into Microsoft's vision -- and how many will purchase the Xbox 360. Heretofore, thecompany's marketing has emphasized that high-definition television willbe at the center of the device. But it appears that the low-end versionof the console won't be able to deliver high-definition images out ofthe box.

The price for the box, particularly the high-end one, couldprove steep for consumers. Many analysts have speculated that Sony willcut the price of its current PlayStation 2 in an attempt to thwartMicrosoft this fall. Meanwhile, Microsoft doesn't appear to have amust-have game yet for the device that will draw in customers.

The biggest games on the current Xbox have been the

Halo

series. But Microsoft, which publishes the title, has not yet given atimeline for a new Xbox 360 version of the game.

In recent trading, shares of Microsoft were up a penny, or lessthan 1%, to $26.75. ADR's of Sony were up 16 cents, or less than 1%, to$33.79.