Xbox One Is Pricey Because Microsoft Doesn't Put Consumers First Like Sony Does

[greenmedic88]

Can't agree with the header. I'm no fan of MS and their past game division policies, but that's an oversimplification.

They're not selling at $499 because they want to generate another billion in profit, they're doing it so they don't lose money on every unit sold. My guess (which remains that until iSuppi does their teardown BoM estimate) is that the box itself probably costs in the ballpark range of $300 to produce, give or take up to 10%. The original BoM for Kinect 1.0 was about $60 per unit. Kinect 2.0 is more sophisticated, and uses much better components (just by looking at the specs and capabilities), and even when taking into consideration that these components cost less than they would have in 2010, my guess would be that the BoM for each Kinect 2.0 unit is anywhere from $60-75, possibly even higher.

So, the total BoM for the XB1 package is probably right around $400, give or take less than 10%.

My guess is that the BoM for the PS4, sans camera system, is closer to $300, give or take less than 10%, or about $100 less.

On one hand, we have Sony, who has done/is doing everything in their power to win the good will of both core gamers, independent developers, and 3rd party publishers in the interest of having the best product launch possible and avoid a PS3 style situation where they came in with the most expensive MSRP for a mass market console (Neo Geo, CD-i, etc. were expensive, smaller niche products) and were completely unapologetic about it ("you'll get a second job to afford one").

MS, seems to be playing the long game. Unfortunately, that involved ignoring most of the concerns of core demographic consumers in regards to DRM, connectivity requirements, product transfers, etc. in the interest of their long term plan. Backlash ensued, MS backpedaled on unpopular policies. They listened to the bad PR, took a look at pre-order numbers and reacted.

Both companies want your business and would be happier taking your money for the least amount of effort or risk. In regards to pricing, all Sony had to do at E3 was announce the same price they were going to announce in the first place. It's not as though they lowballed MS at the expense of a big loss per unit just because they "care about the consumer more."