okay, so everyone has been jumping around the “Xbox One failure in sales” bandwagon after Microsoft announced that its next-gen console would be receiving a nice price-trim in the United Kingdom. Sure, those that were planning on buying an Xbox One don’t mind, but people were quick to jump to the conclusion that the Xbox One is failing in terms of sales and Microsoft is desperate enough to cut prices so early after launching its new flagship console. Yes, it’s true that the announcement came just 3 months after the Xbox One has seen the light of day, which is surprisingly soon by any standards.

Still, the decision makes sense. It’s not that the Xbox One is being completely shut down by Sony’s Playstation 4 (although, Sony is doing better based on all sales data). It’s holding its own as it is. The thing is, the Xbox One isn’t exactly accessible to smaller budget households, and while the $50/£30 price drop isn’t significant, it should still make a difference. The Xbox One has been selling fairly well by all accounts, selling more than 3 million units in 2013 alone. The drop of price to £399 should ensure that the numbers keep growing steadily, and will allow Microsoft to stay competitive with Sony. Add to that the fact that Titanfall will be launching on the 11th of March, and the spring season for the Xbox One shouldn’t be a problematic one.

Microsoft officials defended the company’s decision to lower the console’s price in the UK, and eliminated the rumors that pointed towards desperation as being the primary factor behind the drop in price. In an exclusive interview with Metro, Microsoft’s UK marketing director Harvey Eagle clarified some things. “No, I don’t think so. For us this is about giving UK gamers the best value that we can. We think that that starts with the announcement of this new price point, at 399. It continues with the inclusion of the hottest game of this new generation, in Titanfall, which is now included in the box at no additional cost.” stated Mr. Eagle, a statement which rings true. The addition of Titanfall to the bundle is definitely a good marketing strategy.

Harvey Eagle wasn’t shy to acknowledge the stiff competition either, stating that “And I would also say that this has been our most successful Xbox launch ever in the UK. I think that we can already see that both platforms are commercially successful, that’s great for the industry, but we’re only a few months into a generation that is going to last for many years to come.” This statement also seems spot-on, and it’s nice to see reasonable minds in Microsoft’s leadership for a change. Yes, Sony is currently doing better, but instead of stubbornly holding on to numbers, Microsoft is doing the right thing and adapting to the stiff competition and market conditions. There’s no indication as to why the price-cut is currently limited the the UK, however, and it will be interesting to see if this policy will be extended globally, or not? Cheaper Xbox Ones with Titanfall included surely interest more people than the Brits alone.

Do you find the new offer to be more reasonable? What’s your take on Microsoft’s decision to lower the price-tag of the Xbox One?

hmm i didn't reap the OP

Moderated,

-Mr Khan

Desperation would be deep cuts all around, a small cut in a single market seems to be much more modest than that.

People have to understand Microsoft's model could very well be based not on market share, but profitability per console. We shall see as pricing develops over next 18-24 months.

Yes because companies always cut their profits margins a short time after launch for the lols :P

I doubt it was done "out of desperation" but anyone who think it wasn't in response to the PS4's sales dominance is kidding themselves.

Any price cut 3 to 4 months after launch does indeed scream desperation. But a price cut in one country doesnt scream as much desperation as a price cut across the board.

So...they're just doing this for shits and giggles, then? Because I can't think of any other reason to cut the price AND give away a free game--particularly one as hyped as Titanfall. Why else would they think it was a good value at the original price during launch, and then change their minds just three months later?

Ultimately, the consumer market determines the value of a given product, at least as far as what they're willing to pay for it when supply is widely available and competing products are being made.

One could easily dismiss this by saying that the XB1 was simply overpriced in the UK.

But the statement won't hold up well if we start seeing price cuts across all regions before MS has the opportunity to package cheaper SKUs or redesign the console with lower production costs.

The cuts only in the UK because it was a terrible price to start with. I think only Australia got it worse.

It is desperation and it is an experiment. MS wants to test the market fast to evaluate if they should keep the XBox business or not.

Analysts and share holders are currently pressing the leadership of MS to get rid of Xbos.

I believe the price cut will have near zero effect, and that MS will soon decide to dump Xbox together with Nokia and the rest of their hardware devices.

Most likely a sell off will happen in 2014 while this generation still has some glimmer of hope for the Xbone console and the Xbox brand is still fairly strong. In 2015 when sales have slumped the Xbox business will be a much harder sell.

Just out of curiosity, are there other possible reasons to drop the price of a product than wanting it to sell more?