Microsoft yesterday slashed the price of its Xbox video games console for the third time in a year in response to strong competition from Sony and Nintendo.
The firm is recommending an Irish retail price of €209, a reduction of €40 from its previous price, and significantly below the €479 charged for the Xbox when it was launched in March 2002.
However, the recommended Irish retail price is €10 more than the cost of an Xbox in other continental European states, where an Xbox is now on sale for €199.
A Microsoft spokeswoman said the Irish price was set at €209 because of a higher rate of VAT charged in the Republic.
Microsoft and Nintendo have been battling for the number two position across Europe, a fast-growing market for video gaming. Analysts believe Microsoft's decision to slash prices is a response to similar promotional offers by Nintendo, which is currently selling its GameCube console for just €179.
Sony, which currently holds the number one spot globally and in Europe, is selling its PlayStation 2 console in the Republic for about €269. A spokesman for Sony Computer Entertainment declined to comment yesterday on whether the Japanese firm would retaliate with a price cut.
Microsoft has announced its price cut a month before the annual E3 computer games trade show in the US. In past years, video console makers have waited for the prestigious event to make pricing announcements.
Microsoft, which launched Xbox in Europe in March 2002, last cut prices in September to €249 in continental Europe.
That price cut led to strong Christmas sales and vaulted Xbox to Europe's number two video game console, firmly behind Sony's PlayStation 2.
Microsoft said yesterday it had sold two million Xbox units in Europe so far, putting it narrowly ahead of GameCube but well behind PlayStation 2. Analysts estimate Microsoft was losing more than €100 on each console sold at a retail price of €249.
