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Microsoft's price cuts eat into holiday season profit

Margins affected by cheaper Windows software, Xbox and new Windows pricing structure

Microsoft last year offered a US$400 version of the Xbox One without the motion-control sensor called Kinect, subsequently dropping the price of that product to US$350. The move helped the Xbox gain share in the American market, but revenue also dropped 20 per cent, partly as a result of the lower prices.


MICROSOFT has conjured up some attention-grabbing new products lately to help it restart growth. The company's results over the holidays has showed how badly it needs them to work.

The company said that net income fell during the last three months of the year as Microsoft