Just days after it was 13182.cfm"target="_blank">announced that Microsoft was slashing Xbox 360 prices across the board in Europe, leading simExchange analyst Jesse Divnich has reported that price cuts in the US are the "only feasible and economic option" if the 360 wants to combat the Sony PlayStation 3's ongoing momentum in the console market.
"Whether there is an Xbox 360 shortage or not, it is clear that the PS3 has gained considerable ground on its rival," he said, adding that the PS3's price cuts and the victory of Blu-ray have added strong gains for the console. "Given these past two months and the momentum that the PS3 has gained, Microsoft must react quickly as the PS3's momentum will only get stronger until Microsoft reacts."
The new price cuts in Europe have made the console war much more competitive as the Xbox 360 Arcade is now cheaper than the rival Nintendo Wii and half the price of the PS3.
"In the short-term, Microsoft's only feasible and economical option is to look at reducing its hardware price in North America to at least slow down the PS3's momentum until it can implement more long-term solutions to winning the next-generation console war," he finished.
Upon hearing the report, Microsoft VP of Interactive and Entertainment Chris Lewis added that the price cut would "open up the mass-market floodgates."
"We enjoy 42 per cent of that revenue share Right now in this generation," he detailed. "That's a key milestone for us to have met and surpassed. We're also attaching just a little bit over seven games for every console – considerably ahead of where we stand with our competition."
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