Xbox European Price Drop

It must be close to E3.  Let the price drop frenzy begin!  In Europe, a bizarre place where they call their American Dollars 'Euros', where temperatures are measured in Celsius  - an inexplicable system where obviously low numbers like 17 and 32 are considered warm - and where they judge distances in the ever dubious metric system, Microsoft has announced a fairly significant price drop for their burgeoning system.  This development begs the question across the pond from Europe, which seems to get all the really good deals lately, is there an equal and impending drop coming stateside?

Read on for the skinny!

According to Reuters:

Microsoft Corp. on Thursday slashed the price of its Xbox computer game console by 20 percent in Europe, its third price cut in just over a year as it tries to keep its slim hold on No. 2 market position.

The company will sell Xbox units for 199 euros ($214.40) in continental Europe and 129 pounds ($201.90) in Britain, bringing its prices below market leader Sony's PlayStation 2 and Nintendo's GameCube.

I don't mean to suggest that one console is better than another, but the Xbox being a price point competitor to Nintendo has to be a significant threat, at least in Europe, to the struggling system.  I can't help but wonder if Gates smells blood, and is anxious to force Nintendo, which has already scaled back its profit forecast, into or at least close to a loss position.  Nintendo's advantage  has always been its ability to turn a profit at the expense of market share, but competing against a company that is happy to take massive loss for product placement has to be taking its toll.  Now, I'm not ascribing certain doom to Nintendo here.  I've made that mistake before and come out looking like an ass.  I'm just wondering at the strategy and its effectiveness here.

Of course, it's all a battle for second place.  But Xbox may be making great strides toward putting up a strong fight for the next generation of systems. 

Microsoft and Nintendo have been battling neck and neck for the No. 2 position across Europe, a fast growing market.

Nintendo and some of its retailers have been offering a series of promotional discounts recently to spur tepid demand for GameCube, which carries an average retail price of 199 euros.

It's becoming increasingly obvious that the European market is growing rapidly and is becoming a more significant battleground than even the Japanese market.  As gaming takes increasing hold across the growing economies of Europe, placing systems into the market may pay off for years to come, and the battle for European dollars (or Euros) is a critical one.

- Elysium