Xbox need to resume the $50 price advantage over PS4 to compete.

[greenmedic88]

yvanjean said:

greenmedic88 said:
There is very little incentive to choose XBO over the PS4 for the average consumer at this stage even beyond price. I'm really not convinced keeping every XBO SKU $50 below every comparable PS4 SKU will make any difference at all without software support in the form of exclusive games and extra content.

If MS chooses to cut any sort of profits or even take a loss on each initial unit sold, they'll end up selling many of those units to existing PS4 owners looking to pick up a secondary console on the cheap or dedicated XBO owners who want another XBO which is not what MS wants. They know they have to sell to the previous generation hold outs if they want any sort of decent attach rate for software sales.

One could argue that's exactly what MS has been trying to do with XB360 BC, but that doesn't seem to be creating any sort of pay off based upon XBO hardware sales; it's just a nice bonus for existing XBO owners who already replaced their XB360s.

In the end, keeping that $50 price advantage would mainly result in a $50 loss per unit rather than convert into significantly greater sales to new (non 8th gen) consumers which bring higher software attach rates.

MS should probably concentrate on releasing their hardware update which should be smaller, use less power, come in compact, lighter packaging and a significantly lower BoM before doing any more price cutting.

For every consoles sold Microsoft sell Xbox live at $50 year and for many they sell either an extra controller or a battery pack. They can more then afford to keep the 50$ price advantage.

For everyone saying that price advantage wont make a difference, it's much better then having the same MSRP then PS4. All of last year in America the xbox one was almost on par with PS4 sales, that was no longer true when PS4 drop the price and made both consoles the same price. The xbox one is cheaper to make and has inferior parts then PS4. There no way that without the Kinect, Microsoft doesn't keep the Xbox one cheaper then PS4. The Xbox one at $350 MSRP is probably making a profit they need to keep Xbox one more cheaper then PS4. That's a choice they made when they release a system with inferior specs.

People on this thread saying that Microsoft is done and should move on just don't really understand the market of video games. I guess some of you weren't old enough or haven't experience the 6th generation of consoles. Where Sony controlled over 80% of the console market with PS2. Sony got arrogant and drop the ball with PS3 and tried to gauge the customer and paid the price. The fan punished the Console maker s but eventually returned at the end of the Ps3 era. Sony is a juggernaught in the market and Microsoft is the new comer still. Microsoft made all of Sony mistake at the beginning of the 8th generation and Sony capitalized both on what they learn from PS3 and Microsoft mistake. 

But never the less don't be fooled in thinking Microsfot is struggling just because of Sony's masssive success. Microsoft have built a great consoles that seem to be free of the now famous (three ring of death) and overheating. The Xbox one is built to last and can be scaled with future internet processing technology. Now for what really matters. How is Xbox one doing compared to it's past consoles.

The Xbox one is Microsoft best and fastest selling consoles.

Xbox 360                  Xbox One

2005 -   1,178,000 2013 -   3,075,000
2006 -   7,979,000 2014 - 10,989,000
2007 - 15,859,000 2015 - 19,430,000

The Xbox one is a successfull and profitable machine. If the Xbox one was selling like hot cakes they could be selling on par with PS4 in term of MSRP. But, the reality is that compared to the competition they must always have price advantage due to inferior specs. 

 

 

Yes, the XBO is MS' best console launch which means considerably less given the relatively poor showing of the XB (pulled from the market after 4 years) and the befuddled launch of the XB360 which started with initial low supply and production complications that were later capped by the RRoD.

In 2005, it was extremely difficult to find an XB360 at retail prices due more to low supply (see 2005 sales) than anything else, possibly due to production hold ups. Supply shortages carried well into 2006. This is a bad launch. 

After three generatons of consoles, MS sorted out their initial supply problems and QC problems with the XBO. This is a big success by comparison. 

However, this does not address the OP which flatly states "Xbox need to resume the $50 price advantage over PS4 to compete." Presumably, what is being discussed here is whether a $50 price difference is enough to make the XBO competitive in sales relative to sales of the PS4.

Like many others in this thread, I disagree in that I don't believe it makes a difference given that an XBO can already be purchased for as much as $100 less than a PS4 given many of the deals available through various outlets. There are no supply constraints with the XBO and great deals are easily found as a direct result. Demand is simply such that a lower price has not resulted in competitive sales relative to the PS4.

It should be pointed out that these great deals are coming from various retailers and vendors rather than as a result of MS dropping wholesale prices. That's the key difference. MS isn't losing money on what has already been sold from the factory as retail inventory. 

If someone wants to redefine what is considered competitive from a sales perspective, that's a different debate. 

In general, most on this thread would define that as being something much closer to sales parity than what we are seeing in the VGC numbers.