Tipping its hand about future Xbox 360 models, Microsoft said it is considering a new model to replace its low-end Xbox 360 Arcade, which has been discontinued.
When I asked Albert Pinello, director of platform marketing for the Xbox business, about plans for a replacement of the Arcade, he said, “We wanted to launch our new model first … I wouldn’t rule that out at all.”
On Monday, Microsoft announced its 250-gigabyte hard drive Xbox 360 model with a black finish and a smaller case. It will sell that model for $299. It consequently cut the price of the Xbox 360 Elite model with a 120-gigabyte drive from $299 to $249. And it cut the price of the Xbox 360 Arcade from $199 to $149. But those latter price moves are close-outs; neither the Arcade nor the Elite versions will be replenished after they sell out. Production has shifted to the new model.
Microsoft is shipping the new $299 model to stores nationwide. Pinello said the company will work hard to make sure that there are no inventory shortages. Both Nintendo and Sony have had problems keeping console supplies in stock. Sony in particular has had trouble keeping supplies in stores for the past 10 months, due to the popularity of the PS 3 Slim, which is a smaller version of the PlayStation 3.
Microsoft also runs the risk of selling out of the $299 models even as sales of the older models drop off a cliff. Microsoft will likely struggle to get lots of models into stores. But the summer sales season is typically light anyway. And the supply is likely to be under control by the time Microsoft ships Kinect, which is the motion-sensing accessory for the Xbox 360 arriving on Sept. 19.
Pinello said that Microsoft managed the inventory of the older models downward in the past few months and that we shouldn’t be surprised if the company launches something else to address the low-end of the market by the time the holidays come.
Game developers have never really liked the Arcade model, since they like to design games that take advantage of a hard disk drive in the system.