Microsoft Prepared to Lower Xbox One Price in 2014 – Analyst

From X-bit Labs: Even though Microsoft Corp. has reversed its Xbox One-related decisions regarding connectivity requirements and DRM, it did not lower the launch price of the console and will sell at a $100 price-premium when compared to Sony PlayStation 4. Some analysts believe that due to lower price of the PS4 it will outsell the arch-rival, other assume there will be a tie. Still, it is believed that in case Microsoft faces issues with sales, it can just lower the price of its console.

"Microsoft intends to offer a more robust hardware bundle than Sony will offer, and Microsoft is convinced that consumers will ultimately appreciate the value proposition presented by Kinect," wrote Michael Pachter, an analyst with Wedbush Morgan, in a research note, reports CVG web-site.

Both Microsoft’s third-generation Xbox as well as Sony’s PlayStation 4 are based on semi-custom AMD Fusion system-on-chips with eight Jaguar general-purpose x86 cores, AMD Radeon HD GCN architecture-derived graphics processors and other special-purpose hardware units. Both consoles will have hard disk drives as well as Blu-ray disc drives. Microsoft Xbox One will come with bundled Kinect 2 motion sensor and will cost $499 at launch. By contrast, Sony will not include PlayStation Camera with the PS4 (sold separately at $59), but will sell the console for $399.

So far, Microsoft has been losing PR war against Sony, which has done fabulous job communicating advantages of the PlayStation 4 and not attracting attention to the drawbacks of the system (lack of high-end motion sensor, absence of robust web-based entertainment services, etc.). However, the software company has plenty of time to discuss the benefits of Xbox One. Furthermore, for next year Microsoft might be preparing a price-cut, which could be a particularly good sales driver for an established gaming platform.

“Microsoft has not done a particularly good job of communicating the value proposition to consumers, but today's announcement will remove an impediment to the company's ability to get its message across. We are confident that with six months of focused messaging, Microsoft can fully level the playing field with Sony, and we expect the Xbox One to sell as many units as the PS4. If we are wrong, we think that Microsoft is prepared to lower price next year,” added Mr. Pachter.

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