A $78 Xbox 360 May Be on the Way in May

It's official. Details on Microsoft's next-gen console will be revealed on May 21 at Microsoft's Redmond campus, and while most gamers are aching to know specs and hardware, we here at dealnews are zeroing in on one item instead — the current Xbox 360 console.

As with any gadget, the announcement of the Xbox 360's successor, codenamed Durango, means deep discounts for the current-gen Xbox. And in today's cutthroat gaming industry — which some would argue is being attacked by a growing movement of $99 Android-based game consoles like the OUYA — a deeply-discounted Xbox 360 could have a big impact on the market as a whole. In fact, rumors indicate Microsoft may slash the current 4GB Xbox 360 to as low as $99. But could big-box retailers price it even lower? We dug up the latest deal data to find out.

The $78 Console That Does It All

To measure the type of price drop the Xbox 360 could see with the release of the new Xbox, our plan was to compare the deals the original Xbox console saw when the current Xbox made its debut. Unfortunately, we didn't have sufficient deal data to analyze that price drop, so instead we turned to the next closest thing — the Playstation 3's impact on Playstation 2 deals. When the former made its in-store debut back in 2006, deals on the PS2 dropped in price by a whopping 61% the same month. If we apply that logic to the Xbox 360, we could expect deals on the Xbox 360 console to drop in price by about the same percentage when the Xbox Durango hits store shelves.

And considering the Xbox 360 4GB console has a current MSRP of $199.99, that means deals on the Xbox 360 could price it as low as $78 — significantly cheaper than the upcoming OUYA console and about $21 bucks shy of the top-of-the-line Roku player (with the added benefit of having a massive game catalog at your disposal). Keep in mind though that in order to access streaming services, a user will have to purchase a LIVE subscription which costs $50 retail, or $35 to $45 with a deal.

However, there's one small caveat which could affect our price prediction. Rumors indicate that Microsoft may actually keep the Xbox 360 on the market selling it for $99. Why would Microsoft do that? Well, it would keep casual gamers and potential OUYA buyers under the Microsoft umbrella, while simultaneously killing the Android game console movement. Why would consumers pay $99 for a start-up, Android-only game console when they can have a media hub like the Xbox 360 for the same price?

The announcement of a budget Xbox 360 could also help Microsoft avoid a lukewarm media event (we're looking at you, Sony). But again, that's still a rumor and even if Microsoft keeps the Xbox 360 in the market at $99, it'll only be a matter of time before retailers like Best Buy or Walmart discount the console even further.

A Win-Win Situation

Ultimately, a $99 (or $78) Xbox 360 console is a major win for consumers. Game production on the Xbox 360 isn't expected to halt with Durango's release, and with the Xbox 360's various media capabilities, a sub-$100 media machine (that also plays games) is an excellent deal whether you're a media-streaming junkie, classic Xbox fan, or curious PS3 owner.

Front page photo credit: XBLA Fans
Photo credits top to bottom: Game N Train and LK Gaming