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The recent sales boost Microsoft’s Xbox 360 console has enjoyed since a drastic price cut in September of last year seems to have fizzled out as a result of stiff competition and the current worldwide economic recession take their toll on the once considered “recession proof” videogames industry.  Microsoft reported during their fiscal year end update today, 360 sales for the 4^th quarter amounted to only 1.2 million units, it’s lowest quarter since 2007 when the console sold 0.7 million units for the 3 month period ending June 30^th.  The same quarter in fiscal 2006 saw 1.8 million 360’s sold.

Microsoft’s Xbox 360 console had enjoyed a sales boost versus its competition when they announced lower prices on all 3 available 360 versions in September of 2008.  Prior to that, 360 sales growth had remained flat year over year in their primary, US market to NPD data which tracks sales data in the US.  The price cut came in the nick of time as 360 sales trailed their closest rival, Sony’s Playstation 3, by over a million consoles worldwide for the 2008 calendar year according to Sony and Microsoft’s official numbers.  With the price cut in effect, 360 sales and a strong holiday season enabled Microsoft’s games console to finish the 2008 calendar year in a virtual tie with Sony’s PS3.

Now, after receiving a boost during the holiday season of 35% year over year the impact of the 360 price cut appears to be waning with 4^th quarter sales down 8% versus the same quarter last year.  Lack of perceived blockbuster software titles during the first six months of 2009 have led to an overall decrease in software sales year to date however this trend may reverse itself in the latter half of the year when highly anticipated titles  Modern Warfare 2 and Halo:ODST are set to grace the Xbox 360.  Previous installments of each series have in the past had precipitated increased demand for the 360 console, although the battle for gamers hearts and minds appears far from over.

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