When do you think the next price cut will happen for the X1?

[Arkaign]

Okay, several points here.

(1)- Anyone who knows the console manufacturer to retailer relationship knows that consoles are VERY thin margin SKUs. This is most true during the launch window, but remains true generally throughout the lifespan of the console. Why do retailers accept such narrow margins when their average SKU has dramatically higher margins? Simple : to establish an opening with a customer to continually come back and buy much higher margin items such as controllers and new game releases.

(2)- In terms of cost to retailer vs. sales price, those margins can be razor thin. Walmart may have paid $480+ for XB1s on launch, which is actually a negative effective margin when overhead is taken into account. But for the reasons above, it still makes sense to stock them. The same is true of PS4. Now here's where it gets interesting :

(3)- Unless a console is completely crashed, and the company is SOL (think Dreamcast crash, Turbografx in late 92 onwards, etc), any promotional discount you see will be compensated BY the manufacturer. So those widespread $449 Titanfall bundles we saw in March? Credits were given to the retailers to compensate them for the losses. NO retailer would do a $449 discount on something they paid $480+ for unless there was a big benefit from doing so.

(4)- The above fact is why not EVERY retailer was able to stock the TF bundles at $449. They had to have a good working relationship with Microsoft to participate in that, and many of the smaller retailers just weren't able to get on board.

(5)- We should name those kinds of price cuts as 'official promotional' cuts, as they are directly dictated by the strategies of the companies involved, and are indeed directed BY the console manufacturers.

(6)- This is NOT the same thing as unofficial cuts and non-standard pricing that is not dictated by the console manufacturers. Examples are : Costco pricing things a few % under standard pricing, non-standard bundling of items, or other one-off things that retailers can do of their own accord. Dead giveaways to this type of discount are odd pricing, lack of advertising/promotional materials (Microsoft helped advertise the holy HELL out of the $449 TF bundles!), and complete lack of uniformity. If you see a sale that only applies to a single retailer, then odds are it has nothing to do with the manufacturer.

(X)- The $449 TF bundle WAS fundamentally an official limited-time price cut, for participating retailers. Retailers didn't cut the price without being credited the difference by Microsoft. It's SOP.

(Y)- The $399 DisKinect, after about a year of PR about how Kinect WAS the XB1 and vice versa, and how it would NEVER be sold without it, IS an effective price cut to the PRICE OF ENTRY.

It was a strategic move to offer a way to buy an Xbox One at $399. End of story. If for spin/PR you want to claim it wasn't a price cut, that's on you. Anyone who thinks about it honestly for more than a few seconds sees it for what it is. Same way if Sony released a new SKU that cut back on something (say a pop-top track and cheaper construction, and only the console and controller) and sold it for $349. That's a de-facto price cut, even if the original model is still sold at full MSRP. Given that the XB1 Kinectless and XB1 Madden Kinectless are the only things remotely high in the charts right now, this fact is absolutely vital : at $399, this is a BIG price cut to the cost of getting an XB1 in your hands.