| torok said:
I believe they want market share more than they want profit. XBox for MS is a way to get Windows on the living room. They want Windows on PCs/tablets, Windows Phone on mobile and XBox in the living room, all of them with one app store. If XB1 doesn't gets the market share, they lose one of these markets. In the end, fighting for market share makes more sense than fighting for profit. The one with more market share can determine the rules and that is a pretty easy way to maximize your profits and crush competitors. An example would be CoD DLC deal with MS. If 360 had only 20% of the share and, let's say, 80% of the CoD sales were on PS3, MS probably wouldn't have made the deal, simply because Activision would prefer to reach the higher sales of the (in that alternative world) dominating platform. So the point is, if you lose market share, your dominating competitor will use that to kill your profit. |
That seems at odds with their pricing then. We all know Microsoft is a massive company and could could billions on Xbox over course of a generation and still be well into the black overall. A $499 system is not a strategy to achieve market share, especially when most reports indicate they make a small profit on each system. A $399 would show desire for market share, a $299 would show that is their only concern. I think there is pressure on the division now to not be a loss leader or they would have adjusted pricing before launch.
