Microsoft: Sweet Spot is $199

Microsoft is serious, serious about going casual. Speaking to Bloomberg, a handful of top Xbox execs have reinforced Microsoft’s dedication to capturing the mass market with the Xbox 360, and not simply catering to the same audience that bought the first Xbox.

Director of Xbox global platform marketing Albert Penello echoes a sentiment felt throughout Microsoft’s Redmond headquarters when he says, “I don’t want to be pigeonholed as a hard-core machine.” Microsoft has made a few attempts to reach out to the casual market, most notably its kid-friendly garden sim Viva Piñata, that have thus far achieved little success. But according to Penello, “If you don’t start building that content and reputation it never comes.”

Price is king, according to director of Xbox product management David Hufford. Says Hufford, “We are well aware that the sweet spot of the market is really 199 bucks.” With roughly 80% of PS2 sales last generation coming after the console had crossed the magic $200 line, the point is hard to argue. On Nintendo’s Wii, which is currently selling like gangbusters at a $250 price point, Hufford calls the console a “strong value proposition” and that the inclusion of Wii Sports makes the system appear to the casual consumer as a $300 value priced at $250.

Of great concern to Microsoft is the marketshare and, perhaps more importantly, mindshare that the Wii continues to monopolize. If Microsoft is going to compete head-to-head with Nintendo for the casual market, the typically core-oriented company is going to have to make greater strides towards casual appeal. Plans currently in place to do just that include bolstering the Xbox 360’s lineup of family games as well as revamping retail displays to make those titles more visible.

Top Xbox boss Peter Moore elaborates, claiming, “If we don’t make that move, make it early and expand our demographic, we will wind up in the same place as with Xbox 1, a solid business with 25 million people.”

“What I need is a solid business with 90 million people.”