DJEVOLVE said:
Last gen they sold for a loss right away, So did PS3 and many platforms before. This is nothing new. Xbox could sell one game and a XBox live subscription and boom they are profitable. They also included Titanfall for free which is a unofficial price drop. They will drop price in the fall. By then the xbox cost should have dropped a little. You act as if this is not possible, it's very possible. Not only that, I think they will be profitable soon after this drop. As a whole it's better then losing market share, This stops game sales and many other things. So the price drop is just a drop in the bucket amoung many other things. If I was them i would sell the Titanfall bundle until fall, then drop $100 in price. Titanfall needs a Xbox Live subscription to play. So this will push profit. |
You're thinking 2005. This is happening in a post 2008 world. The days of companies taking $100-200+ losses on consoles with the idea in mind that over several years, they'll make back the losses in licensing fees are over.
This is not my opinion; this is just the way it is.
SCE made numerous drops, but the only one that wasn't accompanied by a re-engineered, cheaper to manufacture hardware unit was in late 2007 when the PS3 was on extremely wobbly legs. Even then, the price drop to $500 on original CECH-A01 units was inventory clearing, even as the redesigned units were on their way to market. Every subsequent price drop was accompanied by a re-engineered design with a cheaper BoM/manufacturing cost.
This is not to say that we won't see a smaller price cut for the original XB1 (we're already seeing an official cut in the UK), but MS made smaller price cuts over the lifecycle of the XB360 ($50) and used software bundles and minor upgrades (HDMI port, larger HDD, etc.) as added incentive while keeping MSRPs the same.
A $100 price cut would likely have to be accompanied by a significantly re-engineered XB1 with a significantly lower BoM. Rumors of a no Kinect SKU or the download only, no optical drive SKU could be sold until the BoM cost on the overall design could be significantly reduced.
But who knows? If sales continue to stagnate over 2013 and the XB brand is starting to look like a bad investment, MS may take bigger losses to save the brand in the hopes of a longer term payoff.