if Sony drops the price will Microsoft follow?

[binary solo]

Aeolus451 said:
I don't think MS should just throw away the profits they would get from holidays just for market share and to possibly win a NPD or two. It's already lost the gen, might as well make some from money from it and make the gamers happy that already bought the console with new games.

Has Xbox ever been about making a profit for MS as the first concern? MS only got into consoles as a defensive / disruptive strategy because they were afriad consoles would be a trojan horse that could one day replace Windows as the dominant PC platform (not sure how they ever got that idea but...) and also OpenGL could threaten the primacy of DirectX. So with those motivations in mind profits from Xbox were of secondary importance to ensuring the continued dominance of Windows and DirectX.

If MS sees a broader strategic interest in maximising install base then they may, because they can, be willing to sacrifice revenue and profit for market share. However, if MS no longer sees game consoles as a strategic battle for OS control (which it isn't, and probably never was, though it probably was/is a legit battle for DirectX vs OpenGL) then they may say that if Xbox is to survive it must consistenly contribute to company profits and not be a drain.

As we are not really privvy to MS business strategy it's hard to say whether market share or profits matter more to them. My gut tells me they want better market share, and that they would see falling further behind PS4 by losing Nov and Dec NPD (they will win Oct NPD whatever happens IMO) as a terrible outcome. So I expect they will drop the price in response to a PS4 price drop.

Sony probably has figured MS would drop the price, so they might be planning the timing for a price cut in the USA in a way that would make it hard to MS to react. Though with what Spencer has said, I think MS pretty much has its figurative hand poised over a price drop button with all manner of promotional material and advertising at the ready.

Of course if PS4 dropped to $300 (unlikely I would think) MS would be pretty screwed with its pricing, because I don't think they would be able to drop below $300, so they would only drop to match PS4. I think a $50 cut is the more likely cut for PS4 though.