The Virtual Gigolo

The pricing of the XBox 360 has gained attention from the press today with news of its upcoming release. Understandably the newspapers have highlighted the price differential between the UK and US as we are used to being ripped off on prices here in the UK, for no obvious reason. Microsoft claims that this price differential is down to nothing more than local taxation.

In this case the newspapers are giving them unwarranted criticism. The prices quoted are 229GBP in the US and 279GBP in the UK. A large difference you might think. However, what we have to remember is that prices in the US are (irritatingly) quoted without sales taxes, in the UK the prices are quoted with a standardised tax. Assuming that 279GBP is the actual price at point of sale in the UK, as Microsoft seems to be implying, let us take the rate of VAT off that price. 279/1.175 is roughly 237.Yes, it’s still more than the US price, but it isn’t substantially more and nothing that couldn’t be seen to be standard variation due to shipping costs or similar issues.

Of course, most Americans will have to pay their local sales tax on that price anyway… this isn’t likely to come even close to the rate of VAT here in the UK, or in most of Europe, for that matter, but this is not something that microsoft can be blamed for, it’s the result of having higher taxation across the board due to a more socialist leaning form of government.