Microsoft Slashes Prices on Xbox Games

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Not wanting to be left in the shadows during the holiday shopping season, Microsoft Corp. (NASDAQ: MSFT) launched a 12-day promotion beginning last Tuesday, and Sunday’s deals are savings of up to 50% on selected Xbox One and Xbox 360 games.

Call of Duty: Black Ops III for the Xbox One is selling today for $29.99, half the usual price. A quick Google search indicates that Microsoft’s sales price is the lowest around. Wal-Mart is selling the game for $49.88.

Another Xbox One game the Microsoft Store is selling at half-price is Star Wars Battlefront, again on sale for $29.99, and again the lowest price we see.

And for Xbox 360 owners, Guitar Hero Live is selling for $79.99, a savings of $20 from the regular price, and the lowest advertised price we see today.

Typically, undercutting your channel partners is not a good business practice. Why would Wal-Mart want to sell a company’s products if that company offered the same product for a lower price? Microsoft has probably told its channel that this is a one-off, and maybe even given some of the larger ones a special incentive to sell these products at the same low price when Microsoft’s promotion ends.

Microsoft, while not exactly ambivalent about Xbox, can’t seem to get its story straight about the future of the game controller. On one hand, it’s a game console, not a Windows-based computer. On the other, it’s a Windows 10-based device that Microsoft hopes to leverage into a replacement for Windows-based computers in consumers’ living rooms.

The more reasons users have to buy or keep an Xbox, the more penetration Microsoft gets into their living rooms and, the company figures, their lives. Thus, low prices for games that are in high-demand feed Microsoft’s strategy of insinuating the Xbox more deeply into users’ day-to-day lives. A similar strategy worked for iPhone after all.