IndustryGamers - Informing the Games Industry

Xbox 360 Slim Could Be Perfect Bundle for Project Natal, says Analyst

Posted March 17, 2010 by James Brightman

Earlier today, reports and new pictures began to surface concerning a supposed Xbox 360 slim redesign. While Sony has already successfully slimmed down its PS3, which enabled the company to pare down costs and sell the console at the $299 price point, Microsoft has yet to acknowledge any full redesign of its Xbox 360. That said, the company has been tinkering with the internal components in recent years to make the hardware less prone to failure for new consumers.

Considering that the Xbox 360 has been on the market since 2005, however, now could finally be the right time to address the form factor of the console itself, especially if it can allow Microsoft to save on production costs. IndustryGamers asked a few leading analysts about the prospects of a 360 Slim, and all seem to agree that it's going to happen. In fact, with Project Natal launching this fall, it could be the perfect opportunity to bundle the new, slim hardware with the motion device.

"I think it is a question of 'when not if.'  In terms of the when, if you are looking at a new bundle like Project Natal that seems like a good time and would make sense.  One goal of MS is to get older Xbox 360 [consumers] to replace their old systems.  A redesign where you change the outside appearance can provide consumers with a real good reason to do exactly that," David Cole of DFC Intelligence told us. "So as a betting man that would be my bet on the when."

Michael Pachter of Wedbush Morgan Securities and Jesse Divnich of EEDAR both agree that a 360 Slim is likely, but they didn't speculate on launch timing. "I think that Microsoft will do whatever it can to take cost out of the manufacturing process.  Typically, smaller means cheaper, and if they can put out a redesigned 360 that costs them $10 less, they should do so," Pachter noted. "My best guess is that the rumors are true, but I must confess that it doesn't make a lot of difference to me either way.  Gamers should care because if Microsoft can save money making the 360, they have a greater ability to pass the cost savings through to consumers in the form of price cuts."

Divnich's thinking was similar: "Like in any business, it all comes down to the bottom-line. I've always believed an Xbox 360 Slim was on the way, it just makes financial sense. Microsoft would save a tremendous amount in manufacturing and shipping costs, and those costs-savings are likely much higher than the cost to engineer an Xbox 360 Slim."

Personally, IndustryGamers would love to see a new, slimmer form factor for 360, especially if it means more reliable and quieter hardware. And Microsoft, please add in an internal wi-fi adpater already.

James Brightman has been covering the games industry since 2003 and has been an avid gamer ever since the days of Atari and Intellivision. He was previously the EIC of GameDaily Biz.