| cheshirescat said: Microsoft has painted themselves into quite a corner. On the one hand I doubt they would like to continue losing so much on each console sold but at the same time bringing the price back up to $400 is basically resigning the rest of the year to sony again. It's an interesting conundrum they have on their hands. |
The biggest problem with leaving the price at $350 is that it will shape consumer expectations for the rest of the gen and essentially put MS $50 ahead of the natural price drop curve (which ought to be determined by falling production costs). The problem this causes is people expect the console to be $50 cheaper than PS4 even if production costs for the One are not falling at that rate. Which means when PS4 goes to $350, MS will lose ground quickly until they go to $300, which could very well put them at a $50+ loss again just as they were starting to reach a break even at $350. Then the same will happen when PS4 goes to $300: MS will be forced to prematurely go to $250. A cycle of this nature could ruin the potential for profit that the Xbox One has. And you can say "MS can afford it" all you want, that doesn't make it smart business or something that the higher-ups are interested in in the least. The price will go back up, if for no other reason than to try and mitigate the damage.
