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There was a bit of a kerfuffle in July when it was revealed that Microsoft Entertainment and Devices Division President Robbie Bach sold $6.2 million in Microsoft shares in the run-up to the announcement of the billion dollar band-aid for defective Xbox 360 units. Executives often use scheduled stock sales to avoid any appearance of insider trading and still pick up some walking around money, but Bach’s sales were unscheduled. Now it turns out he actually sold an additional $3 million worth of shares that somehow fell through an insider sale reporting crack:
Following Sony’s PS3 price cut by a month, Microsoft today announced cuts in the suggested US retail prices of all the Xbox 360 models starting August 8. The biggest cut was $50 on the primary 20 GB version with $20 off the Core system and $30 off the Elite. The full lineup now looks like:
Confounding the rumors that Microsoft would cut the Xbox 360 price after Sony’s PS3 price cut earlier this week, Microsoft’s big E3 announcements yesterday were for a Halo 3 paint job and some miscellaneous games and movies. One can understand the desire not to appear to be in reaction mode, but these barely kept the fans awake.
Perhaps, despite all the evidence to the contrary, Microsoft’s management has some “double secret” plan, but what’s visible is that the belated billion dollar band-aid has tainted Microsoft’s reputation in the game console business (or worse); the success of the Nintendo Wii has blind-sided them; and reciting the mantra that the Xbox 360 will be profitable in fiscal 2008 with the help of some creative accounting doesn’t dispel the fact that it has been a very bad business venture for Microsoft. The question is whether, ignoring all the sunk costs, there is any expectation of it becoming a worthwhile investment in the future compared to Microsoft’s other opportunities.
Sony today announced a $100 price cut on the PlayStation 3 game console in hopes of revitalizing the PS3′s lagging sales and immediately raising the question of what Microsoft’s response might be:
