Will Microsoft Give The Xbox One A $50 Price Cut? – Forbes
Microsoft’s Microsoft’s Xbox One, as we all know, is $100 more expensive than the PS4, at least officially. We suspected that price would be trouble from the moment Microsoft announced it, half-mumbling at its E3 press conference last year. Even though the console is selling respectably on its own terms, it’s hard to believe that the price difference isn’t the major reason Microsoft is losing the global sales war to the PS4 so far. All consoles get price cuts, some sooner, some later. The question then becomes: when will Microsoft drop the price on the Xbox One?
We’ve seen an interesting phenomenon emerge in recent weeks. First, Microsoft announced a $500 Titanfall bundle, effectively cutting $60 off the price of a brand new Xbox One and a single game (so long as that game is Titanfall). But then, major retailers including Amazon, Walmart, Target Target and Best Buy all chimed in too, cutting an extra $50 to bring the price of the Xbox One and Titanfall just about in line with the price of a PS4 and a new game. Microsoft responded in kind with a limited time offer on its own website, pricing the Xbox One for $450.
The most natural inclination would be to believe the messaging here: “limited time offer.” Microsoft hasn’t had a nice big number to announce in a while, and it could sure use one month of beating the PS4 to bring up a counter-narrative. Titanfall has always been one of the key pieces of its launch strategy, and it sees no reason not to embrace the discount , boost the numbers and get some momentum going. Hopefully, the logic goes, by the time we return to a full $500 (or $440, depending on how you slice it), it will be inside of a more active ecosystem brimming with excitable Titanfall players.
But I can’t help thinking there’s a long-term experiment happening here too. Remember, this discount started with retailers, not with Microsoft — those companies clearly felt that in order to move large numbers of Xbox Ones, they would have to sweeten the deal (especially as PS4s continue to fly off the shelves faster than Sony Sony can keep them in stock). Microsoft followed suit. If this experiment succeeds in jolting the numbers, Microsoft might look at the ledger sheet and decide that the momentum gains are worth a short-term loss. The company has re-affirmed its commitment to the Xbox brand since the reign of CEO Satya Nadella, and they might as well try to ensure its strength.
I predict that either we’ll see an official price cut before the next holiday season, or we’ll enter into the sort of situation where a critical mass on deals makes it so anyone who wants to get the box for $450 can do so with a modicum of patience. After all, the PS4 is bound to get a cut at some point, and it would behoove Microsoft to get the jump on that. Microsoft has been saying since the beginning that this is an entertainment box, that this is a gaming box, that this is its bid to take over the living room. Considering the money waiting to be made off a console that truly does serve as the center of an entertainment system, Microsoft might be wise to establish that ecosystem with a bit of a hardware loss.