Microsoft Corp. does not want to lose this round of game console wars to Sony Corp., which is why it takes bold actions like unbundling Kinect motion sensor from Xbox One or temporarily cutting the system’s price. According to a financial analyst, Microsoft will not be able to return the price of price of Xbox One to normal levels in the U.S., whereas Sony will not cut the price of its PlayStation 4 any time soon.
Michael Pachter, a renowned video game industry analyst from Wedbush Morgan, believes that after Microsoft once reduced the price of Xbox One to $349 in the U.S., it could not return it to the original levels and continue to enjoy great sales. In fact, after outselling PS4 for two months in November and December, Xbox One failed to leave its arch-rival behind in January after its price went back to $399.
“I think when Microsoft cut this early in the cycle, they kind of screwed themselves into keeping the price down,” said Mr. Pachter in an interview with GamingBolt. “I have a feeling we’ll never see a $399 price point again, and if they do it, you know, you will tell your buddies ‘Don’t buy it now. Wait, because they’ll get desperate again and the price will drop fifty bucks’.”
Microsoft desperately wants to win its battle against PlayStation 4 because every sold Xbox One represents a revenue stream in the future. As a result, the company will likely keep the price at the current level. By contrast, Sony, whose PlayStation 4 consoles are selling very well, will not cut their price any time soon in the U.S.
“The interesting thing is Sony’s probably not feeling too compelled to cut, so I think Sony’s probably going to stay at $399,” said Mr. Pachter.
While Microsoft reduced the price of its Xbox One in the U.S., in the U.K. and Europe the console costs the same amount of money as Sony’s PS4. To attract gamers, Microsoft offers various Xbox One bundles with free software. Keeping in mind that Microsoft needs to sell as many consoles as possible, it is logical to expect the software giant to continue offering attractive bundles going forward.
Discuss on our Facebook page, HERE.
KitGuru Says: It will be extremely interesting to see is how Microsoft and Sony will behave during the holiday season. Both companies are rumoured to be working on more affordable versions of their consoles, which are expected to hit the market later this year. Will the two companies start a price war, or will they continue to offer their PS4 and XB1 systems at similar price points again? We’ll wait and see!