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Exchange Rates Make Microsoft's 360 Price Hike A Little Iffy

Illustration for article titled Exchange Rates Make Microsofts 360 Price Hike A Little Iffy

Like the US, the 360 Elite is getting a hefty price cut in the UK. But unlike the US, the price of the Arcade 360 in the UK is about to go up. Hey, Microsoft, what's the deal?

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Microsoft Europe's Chris Lewis has told MCV "We are making modest increases on the Xbox 360 Arcade console as you can see. The reality now is partly to offset currency exchange rate fluctuations which have impacted us in local market conditions – particularly in the UK."

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"And you've seen other consumer products operate in the same way. But I think even with that we still offer the most affordable console in the marketplace out there."

"So we've reset the price point largely based on exchange rate fluctuations, but are still very happy we offer great value through the Xbox 360 Arcade."

Currency fluctuations, eh? Take a look at this chart below, showing the value of the Pound against gaming's three major currencies: the Yen, Euro and US Dollar. Your eyes, they do not deceive you. The pound has increased in value over the past six months, meaning overseas purchases are cheaper, meaning the exchange rate excuse doesn't hold water. And it's the same for the Pound against the Yuan, as well as for the Euro against all mentioned currencies.

So if the price hike was "partly" due to "currency exchange rate fluctuations", we'd love to know what the rest of the reason was.

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Illustration for article titled Exchange Rates Make Microsofts 360 Price Hike A Little Iffy

Arcade hike due to ‘currency fluctuations' [MCV]

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DISCUSSION

It's still the cheapest current gen console in the UK market. It's still cheaper than the Wii, and we all know how much that costs to build...

I have to wonder if anyone has considered the possibility that MS decided to raise the price simply because they've been selling the arcade in the UK at a tight or no margin for so long (in an attempt to increase their market share there, it was blatant when they released it) that it's become a liability to maintain that pricing. This is compounded by the fact that their worldwide sales are being hurt by the poor exchange rates elsewhere, may have put pressure on MS Europe to bring their margins up closer to parity with other markets.

So perhaps it's not the GDP's value, but rather just that they can't afford a "loss-leader" type product in the UK any more.

It would just be nice if they'd be more open about it, they might piss less people off in the process.