Microsoft holds firm on Xbox 360 pricing

By Scott Hillis

SANTA MONICA, California (Reuters) - Microsoft Corp. (MSFT.O: Quote, Profile, Research, Stock Buzz) said on Tuesday it will hold firm on pricing for its Xbox 360 game console, defying widespread expectations that it would respond to a price cut by rival Sony Corp. (6758.T: Quote, Profile, Research, Stock Buzz) for the PlayStation 3.

Instead, Microsoft voiced confidence that a slate of upcoming titles targeting both hardcore and casual gamers would be strong enough to give it the lion's share of consumer dollars in the coming months.

"We have no desire, no need, to react to anything the competition has done," Shane Kim, head of Microsoft Games Studios, said in an interview.

"We feel really great about the Xbox 360 momentum right now. Customers are voting with their wallets, it's not just about console units. We feel great about how we're doing."

On Monday, Sony cut the price of the PlayStation 3, which competes against the Xbox 360, by $100, or 17 percent, in the United States in an effort to boost flagging sales.

That means the machine, which has a 60-gigabyte hard drive and Blu-ray high-definition DVD player, costs $500, or $20 more than the high-end Xbox 360 Elite that has a 120-gigabyte hard drive but no built-in high-definition DVD player.

Microsoft also has a "premium" Xbox 360 with a 20-gigabyte hard drive that sells for $400, and a "core" version with no hard drive that costs $300.

Sony's cut also came days after Microsoft said the number of broken Xbox 360s was "unacceptable" and that it would book a charge of up to $1.15 billion for repairs and warranty extensions.