Microsoft is starting to realize that it's going to take a lot more than a couple of pinatas to expand their Xbox audience. Worried that the 360 will get "pigeonholed as a hard-core machine", Microsoft is looking at this holiday season to see what can be done. Though he declined to say for sure whether or not Microsoft will reduce the cost of the Xbox 360, David Hufford (a director of Xbox product management), sees the potential for making it more affordable for the consumer:


We are well aware that the sweet spot of the market is really 199 bucks... (The Wii, at $250, makes a)strong value proposition. When mom walks into the store and sees she can get a console with a game for $250, she sees it as a $300 value. They've done a good job.'

Sony sold 75 million PlayStation 2s at or below that price, but it's unclear if Microsoft can price the Xbox 360 that low when they already lose money on each console that is sold. An analyst predicts that this Christmas, they'll need to have as many consoles out there so that fans can help them cash in by buying games. I don't mind helping them out this year, as long as I don't see another red ring of death from now until Christmas."