Here’s why an Xbox One price cut would be a huge mistake

Now that the Xbox One has fallen firmly into second place as the PlayStation 4 continues on its tour of world domination, fans of the Microsoft console are looking for answers. The $100 price difference between the consoles has clearly been a factor, but the wave of negative PR that surrounded the announcement of the Xbox One hasn’t helped either. How can Microsoft turn this console generation around before it completely loses momentum? Is it already time for price drop?

Not according to Forbes contributor Erik Kain:

“Cutting the price of the Xbox One this early into the console’s life-cycle would be a mistake,” says Kain. “If Microsoft slashes the price of its system from $499 to match Sony’s $399 PS4, the tech giant would lose money—quite a bit of money—on each unit sold.”

[SteamPowered]

Makes sense. The loss on hardware just wouldnt be made up by games. There simply isnt enough X1 exclusives to really make consumers come running.

[Excalibur]

In my opinion there is no current exclusives that would make me want to drop $500.00 or even $400.00 for that matter.

Not only that, 95% of everything currently released could be played on the 360 so..

And before someone jumps in and says "yeah but the graphics are better on the Xbox one than the 360".

Don't go there, I don't know how many times I've heard the Xbox One defenders say graphics and frame rates don't matter when comparing the xbox One to the PS4 so save it.

BTW this is exactly what I'm talking about, there is not that huge of a difference that would make me want to spend an extra $400.00- $500.00 right now, I'm playing Thief on my 360 and I'm good with it.
http://gearnuke.com/thief-o...

[SteamPowered]

Ex, youre absolutely right. The X1 would almost have to be cheaper than PS4 right now. Say what you will, PS4 has the better version of multiplats right now.
And the 360 is still going strong. MS hasnt come close to dropping support for it.
In the end, Microsoft hasnt really made X1 a must-have yet.

[sentury111]

There is a difference in comparing last gen with current. So far the games on both consoles are near identical to the naked eye.

[djplonker]

Ugh why is losing money on a console so strange to microsoft it is the main rule of console manufacturing... take a hit on the hardware and make it back from the software unless said manufacturer is exceptionally greedy!

[Godmars290]

For one thing with the first Xbox they made a massive mistake. Leased rather than bought key parts. Couldn't change anything in regards production and lost money on every system sold.

Then with the 360 there was the RRoD and the costs to cover it.

Now there's the XB1 which has the Albatross which is Kinect around its neck. Which is likely why its $100 more but less powerful than the PS4. Even if MS drops Kinet and lowers the price, that's a lot of R&D money gone. Along with most if not all of their remaining strategy for this gen.

[djplonker]

Well said bubbled up!

And even if they do take the kinect out and lose that r&d money there is still the weaker hardware problem because of the kinect... the next few months will be interesting...

[Excalibur]

“If Microsoft slashes the price of its system from $499 to match Sony’s $399 PS4, the tech giant would lose money—quite a bit of money—on each unit sold.”

Not if they released a Kinect-less version.

I keep hearing the argument over and over that without Kinect the Xbox One would be just like the PS4, please tell me what Kinect 2.0 adds to the system?
A way to turn your system on without a remote?
A way to switch blades without a remote?
Really? Are you really holding on to the notion that waving your arms around is somehow easier than using your finger to press a button?

Well Kincet 2.0 has Voice controls too!
Ahh.... yeah, you can do the same thing with a headset.

Face it, Kinect is a gimmick, if you like that gimmick that's fine but don't force it on the rest of us.

Keep defending that anchor called Kinect and it will drag your system down even further into murky waters.

[No1up]

Excus me sir, kinect allows me to yell at my TV several time to turn off... The general rule of thumb is yell xbox off 3 to 4 times... Do you know how much stress can be released by yelling?

[rdgneoz3]

Especially if you have a significant other or small children in the house, yelling at 2 am is such a stress relief.

[sentury111]

Well said

[SteamPowered]

Or waving like the Village People at a Pride Parade just to get the kinect to notice your gesture controls? Its a great shoulder workout.

[Kidmyst]

Kinect free bundle and move the features from behind the paywall to match how Sony has it and it'll help turn things around a bit. If you buy a console just to want to stream movies and TV and play a game now and then, it doesn't make sense to buy the console that makes you pay to access the streaming features and have a camera that won't be used.

[BladerunnerZX]

Kidmyst that is the most logical statement I think I have EVER seen on this site.

You may be a genius , bubbles for you.

[AngelicIceDiamond]

@Excalibur Well that kind of comment is usually made by someone who's never used Kinect in first place so you can't talk about the experience.

And this is coming from someone who absolutely did not buy Kinect 1.0 simply because I didn't care about Kinect gaming. (and didn't wanna spend the money)

If I wanted to use Kinect it would be for navigation and voice not for gaming, that's not my thing at all.

AS for an Xbox with out Kinect? http://www.cinemablend.com/...

I already stated why it wouldn't make sense. Why would MS sell Kinect by itself for 200 to maybe 250$ standalone? Kinect 1.0 isn't selling as nearly as much as it was how would Kinct 2.0 fair with a higher price?

I can't see consumers buying X1 for 400 then buying Kinect for 200$ more hell no.

Kinect's not going anywhere MS will cut the price with Kinect in it they spent stupid amounts of money on Kinect 2.0 so its not happening now lets move on.

[Excalibur]

@AngelicIceDiamond

I have a Kinect for my 360, My Gf bought it because she wanted to do her exercise program, we also played the sports game that came with it, it was entertaining for about 5 minutes and then it became a nick nack dust collector, I don't need nor do I want another.

If you don't believe me go under my account and you will see the various Kinect achievements I have.

[Why o why]

Fall further behind or take the hit in attempt to keep up. If I suggest the third option ill be set upon by angry wolves

*cough*ditch kinect*cough*

[No1up]

Ditch kinect or add a game and free xbox live for a year.

[No1up]

And what the fu"( is Elop doing in charge of the division you idiots?!

[rdgneoz3]

He is known for wanting to sell things, even if it is an entire division...

[Demarco156]

xbox one is in third place last time i check

[jmc8888]

The article is wrong.

Keep the price high and say goodbye to a three console investment. Xbox and 360 got them to where they were last year, and while the One is pissing that all away, by keeping the price high it's only draining faster.

They needed to not be +100 over the PS4, they need to be -100 under the PS4. So they need to take a big hit, plus get rid of Kinect (optional).

So $399-429 with Kinect
$299-329 without Kinect

Then spends billions on creating and acquiring about ten game devs and have them immediately start on some games so in late 2016 to late 2017 those games can start coming out.

If they don't do something like this, expect a hard generation for the Xbox One where at the end, Microsoft will have bled money throughout the generation, and in the end the marketshare of the Xbox will be quite tiny.

Too late to change the console itself, only price and exclusives is what they have to keep it all from imploding.

Keeping the price high won't save the unit if Microsoft is considering selling the Xbox unit.

It is funny that people worry about early adopters, because last I checked, every early adopter knows the risks. Besides, if no one buys the console, and devs stop supporting the console, and you have no one to play multiplayer with, then don't the early adopters lose more?

[Grave]

I could see a Kinect-less model at $349 finally being enticing to a much larger market.

[jmc8888]

Yeah. It needs to be lower because it performs poorer on the same game.

At lower price points they also suck up the crowd that won't buy the PS4 because $399 is too much to them. Especially when you get to parents.

So you're right, $349 might be too high still, but yes, every bit lower then $399 starts putting Microsoft in a larger market.

It's not that difficult for Microsoft to do. There's tons of various graphics cards for PC's. You have graphics cards from $29 to $1099 and sometimes even more, and people want what's appropriate and fair.

If you're charging $499 and delivering less then a PS4, there simply is no way to justify that.

So it needs to be a price point notch or two lower then the PS4. This will match up with what it delivers. Lesser Next-gen visual capability. But still a next-gen console.

It can do some nice things, but it can't do what the PS4 can do, and so it shouldn't be priced as such.

At the lower price it goes from being a rip-off, a murderous rip-off in the UK ($712 before the recent drop) to decently priced.

Remember a system with the graphical capability of a $120 graphics card. Yes it has more and all of that, but $499 or $712 is alot higher then $120 and whatever you might have to add onto that. This is a viable option for many people with PC's.

http://www.newegg.com/Produ...

$129 for a 1.4 TFlops GTX 650ti, $15 rebate would mean $114 after rebate.

Oh and it comes with Final Fantasy 14.

So more powerful then XB1, $114, plus free Final Fantasy 14.

Because when you have this, and you have free phone games, you have 360's and PS3's and even the PS4 cheaper, Microsoft really needs to showcase, no...PROVE why they are such a premium priced device.

[MNGamer-N]

I want one, but price needs to come wayyyy down. My PS4 and WiiU will do nicely until then.

[king_george]

Same here. Im actually interested in the upcoming games for the X1 but there is no way in hell im handing them 500 bucks plus tax...

Titanfall, Halo, Forza, Fable, etc.., all make it hard to resist for me but i can hold off until they drop the price to somewhere in the $300-$350 price range.

[PainUzumaki]

UMMM.....Just bundle it without a kinect you idiot.

[sAVAge_bEaST]

This has been the longest train wreck, I have ever witnessed.

Beginning: May 21st, 2013

Ending: ???

[GordonKnight]

Really I think Sony in a position where they could increase their price point to $450 or even $500. The console is worth it. Sony isn't be taking a loss on the PS4 with the high demand for it.

It would be a nice reward for all the early adopters.

Then think how well the PS5 would sale next dev. Everyone be like I need to get my PS5 before they raise the price!

It just might work.

[Nivalis]

It hasn't fallen anywhere, let alone "second place", its been third place since it launched and will remain their till it someday outsells the WiiU.

[Brix90]

Kinda off want to buy one but not desperate to drop 500 on it sorry...MS hasn't proved to me its worth that much.

[jmc8888]

Oh and here's another thought.

If Microsoft fans still bought an XB1 after all of this...

DRM, then reversal
Always on/24h check, then reversal
Family sharing glorified demo, then reversal
No backwards compatibility
$499
Forced Kinect
Lies of the Power of the cloud
...and all the rest

It takes a lot of loyalty to take it up the shaft that many times and stay with someone.

Then why would they suddenly get mad and bail after a price drop? Unlike any of these others situations, early adopters of any product, especially tech product knew price drops would be coming sooner or later. It happens with every piece of tech.

Do we know whether or not the Xbox 2, PS5, Wii U2 or some other entrant into the console business will use DRM next console cycle? NO

What we DO KNOW is that after a period of time, short or long, each one of those consoles will get a price drop.

So yeah, it would be pretty silly for someone to stick with MS through all this actual crapstorm of bad ideas only to leave them for something they clearly saw coming, an eventual price drop...which because of how the XB1 is positioned, seems to be sooner rather then later.

[DC777]

Dumb advice from Forbes per usual. They have to drop the price quite a bit and take the hit. $540 on a system known to be the less desired is way too much.

Suggesting they don't drop the price and continue in this manner is dumb. While they aren't selling a lot of consoles they also aren't selling a lot of extra controllers, headsets, games and all the other extra b.s. that goes with people having one. You can't grow the brand if you don't get units in people's homes first. Stream lining and cutting some waste out of production costs will help ease the pain. Not to mention getting online subscriptions for Xbox Live that you may not be getting now. Waiting until PS4 has a huge install base to play Destiny together will be a huge mistake.

[josephayal]

price cut? TitanFall Bundle is selling like hot cakes

[FRA85]

Has'nt this already happened??

thought price was cut last week in UK