Xbox 3 accessory pricing confirmed

After two years playing nip-and-tuck with Sony, Microsoft is upping the price of its Xbox and introducing 'basic' and 'premium' editions of its next game terminal.

The details conform earlier reports that Xbox 360, expected this holiday season, was to be priced $299 in the US. The price was allegedly leaked by Wal-Mart employees.

Microsoft's pricing appears to send the signal that it will no longer compete in North America and Europe on price cuts. The Xbox Core Package price takes the Xbox back up to the terminal's November 2001 debut price point. A succession of reductions has taken the Xbox's price down to its current $149.

Microsoft engaged in price cutting as a response to Sony cutting the PlayStation 2's price tag and to also help kick start sales of the Xbox.

Increased prices and the 'premium' Xbox 360 seem to be an attempt by Microsoft to build on market share gained through those early cuts and hit a self-imposed profitability deadline for the Xbox of 2007. Microsoft has been making a loss on the Xbox, and - prior to May 2002's first Xbox price cut - was estimated to be losing between $76 and $105 on each Xbox terminal sold.

The Xbox 360 Core System will include the terminal, controller and customizable faceplate, informs the Register.

"By definition early adopters aren't price conscious," said to Reuters, Wedbush Morgan Securities analyst Michael Pachter.

The new console will launch simultaneously in the U.S., Japan and Europe ahead of the holiday season, Microsoft said.

The Xbox 360 Core System will sell for 299 euros in Europe and 209 pounds in Britain. The higher-priced version would be 399 euros and 279 pounds, European home and entertainment head Chris Lewis told journalists at Europe's biggest computer games fair in Leipzig, Germany.

The company said it would unveil pricing for the Japanese market at the Tokyo Game Show next month.