There were two distinctly different reactions by the media during the Microsoft and Sony E3 media briefings a couple weeks ago in response to the Xbox One and PS4 price announcements. Gaming industry analyst Michael Pachter of Wedbush thinks one of those reactions will result in a change of strategy heading into next year.
Microsoft was rolling through their E3 media briefing by fulfilling their promise of focusing on games and not the “all-in-one” aspects of the Xbox One. They had revealed a cinematic trailer for another Halo game and seemed to have grabbed back some of the positive buzz that was lost in the midst of unwelcome DRM and used games policies.
Then Microsoft announced the $499 Xbox One price and low rumblings of disappointment echoed throughout the venue. Expectations headed into the briefing were that both Sony and Microsoft would hit a $399 price point, and here Microsoft missed that mark by a three-figure sum. Any momentum gathered to that point vanished with three numbers and a dollar sign.
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Sony capitalized on this, of course, by playing into consumer demand and removing the PS4 camera from their package to bring in the PS4 price at $399. Though this price may end up losing them some money on hardware, they seem content to make that up in $50 a user/per year PlayStation Plus fees required to play any kind of online multiplayer modes. Let’s face it, when it comes to games like Battlefield 4, Killzone Shadow Fall and Call of Duty: Ghosts, most of the gameplay hours logged will be done against friends online.
Pachter believes Microsoft made a grave error in pricing Xbox One at $499. “They’re going to regret the decision because I think people are now going to talk up Sony as the winner,” he commented. “The good news is Microsoft will cut the price shortly after Christmas – probably will.”
This Xbox One price is pure speculation on Pachter’s part, of course, but there is some historical precedent in play. Not too long ago Nintendo released the 3DS handheld gaming system with a lack of marquee titles and a price tag that most balked at. When Nintendo shaved off a substantial portion of that price and released some of their top properties on the system, sales picked up steam in a hurry to the point where the 3DS was the top selling gaming system – including consoles – in May 2013.
Pachter’s belief that Sony and Microsoft will engage in a price war would certainly benefit the consumer. After the holiday shopping period has passed is when the real evidence of who is “winning” the next-gen console war will start to surface. Microsoft already bent to Sony once on DRM and used games policies. Let’s see if they do it again on price to truly level the playing field.
