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@Squilliam

Your graph is flawed, because it neglects another valid line of thought. Either the manufacturers can stay put, or decrease the price point in your scenario. For Sony that may very well be the only options. However Microsoft has a third option, and that is value increase. Not so much as games included, but library acquisitions. The infamous purchasing of exclusive titles for their platform.

Microsoft has reached the proverbial main stream price point. So they probably would focus assets towards purchasing exclusive games, and that is actually strategically the soundest decision. Allowing them to crush Sony from two entirely different angles. Either forcing Sony to fight on both fronts, or forcing Sony to concede defeat in one area or the other. Sony probably could not do both. They either need to preserve their library or lower the consoles price.

Bottom line Microsoft has a lot more flexibility in their strategy. I would be more apprehensive about what games Microsoft has on the roster for next year. That could be their knockout blow. While Sony is trying to find a way to reduce the price. Microsoft could build an unstoppable lineup.