1 Perspective2 Tough Sell3 Competition
Michael Pachter, a gaming industry analyst says Microsoft has overpriced the Xbox One X. He also explained in an interview with GamingBolt what the price point means for the company and potential sales figures: “So I think $500 is a lot, and I think we’ve been trained since at least the PlayStation, and probably since before then – I don’t actually remember what the NES was at launch – that $300 is the price point people are willing to pay. And Microsoft started this $400 price point with the Xbox 360, Sony, of course, made the mistake of pricing the PS3 at $600. PS4 was $400, and quickly dropped to $300… I just think people are willing to pay $300 for a console, but not $500, $500 is way too much. And given that you frequently see Xbox One S and PS4 Slim discounted to $249, or at $299 with a good game bundled, the perceived price for both is $250, regardless of the sticker price.” Whether you think the Xbox One X is too expensive is all about perspective. Although, Pachter is probably right that the device is too expensive for most casual customers.
Perspective
I have previously argued that Microsoft is playing a dangerous game with the Xbox One X pricing. At E3, the company confirmed what was known, it would make its new console fall under $500. If we look at Xbox One X as an entirely new next-gen console, then $500 is about par for the course. A little expensive maybe, but probably within the ball park of expectation (although, $400 seems to be a sweet spot for success). The problem lies in the fact Microsoft is pitching the One X as next-gen hardware, but in a current generation family of consoles. It would be wholly unfair to say the Xbox One X falls into the incremental update category that all other mid-gen consoles fall into. Scorpio is a seismic leap forward, that cannot be contested. It is not, however, bringing the curtain down on the 8th generation and opening the door to the ninth. Microsoft must convince consumers that their device truly is the future and worth spending money on.
Tough Sell
I am not talking about the enthusiast gamer. Microsoft probably won them over almost instantly, and within reason considering the potent performance of the console. No, instead it is the casual gamer Microsoft must convince. The gamer who probably already has an Xbox One, Xbox One S, or even a PS4. Is the Xbox One X, with all its tech wizardry, enough to convince those consumers to head back to stores for another console round this Christmas? Pachter clearly thinks not, and I am unconvinced.
Competition
There is absolutely no doubt that the Xbox One X bests the Sony PS4 Pro in almost every department. Our side by side analysis of the consoles shows that Microsoft’s device is simply a level above. The company knows this and is playing to the crowds to make sure they know it too. Sony may have lost the tech race, but it could still win the sales race. The PS4 is already well ahead of Xbox One in terms of lifetime sales, and that will not change regardless of how successful One X is. However, Sony could make the Xbox One X a failure if it makes a widely anticipated move, and consumers are not swayed by Microsoft’s pay more money for better hardware approach. I previously pointed out that a simple price reduction for the PS4 Pro this winter could cause Microsoft big problems. Currently priced at $399, the PS4 Pro is already $100 cheaper than the One X. Again, this is not a hardware issue. I think it is fair to say the Xbox One X is at least $100 more machine than the PS4 Pro, but that’s not the point. If Sony knocks $50 to $100 off the Pro, it would cost either $350 or $300. Either of these price points is a concern. Can Microsoft compete against a console that is nearly $200 more affordable? By the way, it is worth pointing out that Microsoft is aware of the situation. Xbox chief Phil Spencer has said that the company knows the majority of its sales next year will come from Xbox One S. That’s why it is best to think of the Xbox One X as a next-generation machine ahead of its time. A trail blazer yes, but a sales juggernaut no.
