Xbox 360 price cut finally official, emphasizes Netflix and music

The  Xbox 360 price cut that I first said was likely way back in July and has recently been predicted by every videogame blog based on leaked retail circulars is finally official. As expected, it's $200 for the hard-drive free arcade version, $300 for the standard version, and $400 for the Elite with a big ass hard drive. (If I were like a certain other blogger, I'd be yelling "toldja!." But suffice it to say that Cut Scene readers should have been expecting this for almost two months.)

While serious gamers will appreciate the price cuts on the standard version and elite, it's very apparent that Microsoft is emphasizing the new price of the arcade version. The press release is pretty dramatically titled "The Moment Is Now: At $199, Xbox 360 Invites Everyone to Play." But it's the first sentence that really intrigues me:

Imagine if friends and families had the ability to instantly watch movies from Netflix, live out their musical fantasies through "Rock Band 2" (Harmonix/MTV Games) and "Lips" (iNiS Corp./Microsoft Game Studios), star in their own Hollywood classics with "You're in the Movies," or have the power to never miss the latest episode of "Heroes" -- all from one device, starting at $199.

They're selling a videogame console and the very first feature mentioned is streaming movies. The only games mentioned here are all casual titles based on music or movies. In fact, you have to go all the way down to the second half of the fifth paragraph to find even a mention of a non-music or movies game, where Microsoft finally gives a nod to its biggest first party title, "Gears of War 2," which it says will be "the biggest entertainment event of this holiday season." (I expect a few films like "Quantum of Solace" might disagree, but anyway)

There's not a single mention of major non-exclusive titles like "Fallout 3," "The Force Unleashed," "Call of Duty: World at War," etc. Why? Microsoft is apparently betting that most gamers who buy titles like that already at least know about those games and what the 360 offers or, in a worst case scenario, all already own a 360, which would explain the slow sales this year, even around the launch of "Grand Theft Auto IV."

Which is why this release mentions Netflix streaming three separate times (getting even a fraction of   Netflix's 8.2 million subscribers, many of whom probably don't game, would be a major coup for Microsoft), makes a big deal out of "Rock Band 2," "Lips" and, to a lesser extent, non-360 exclusive "Guitar Hero: World Tour," and devotes extensive space to downloadable movies and TV shows.

As Don Mattrick alludes to in the release, the majority of console sales in the last generation generation occurred below the $200 price point. By beating Nintendo and Sony to that mark, Microsoft, which has been mired in third place for console sales all year, is hoping it can get a big boost this holiday season. And it's heavily emphasizing the content it has for casual buyers who might finally be opening their wallets to a videogame system at $200 for the first time.

The three big questions in my mind:

-Can a $50 price advantage make up for the overwhelming public perception that Nintendo's Wii is the console for casual players, not the 360?

-Will those who buy a 360 Arcade be annoyed when they find out the limitations of not having a hard drive? They can't do any of the video downloading that Microsoft touts in its press release, for instance.

-Does Sony need to respond? Sure, there's a good argument that the Playstation 3 is a better deal at $400 than the 360 Elite (it's a Blu-ray player, has built in wi-fi). But right now it's completely and totally ceding the family/casual market to Microsoft and Nintendo. If it does that for too long, its entire business will be staked on the avid gamers, which is not a good place to be, especially given the very broad penetration last generation of the Playstation 2.