Xbox One Drops Price. World Goes Crazy. Overreact Much?

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The Xbox One price drop. Let’s keep calm and look at this from another angle. There’s are 3 very specific points, I want to address in this article, the 3rd one being the most important. Skip the first 2 points if you want to.

The UK Price Drop:

Well that’s seems to be the order of the day. It’s been reported across several sites now that the Xbox One has dropped it’s price in UK and now offers the TitanFall bundle for just £369.97. Well done Microsoft, a complete value for money proposition if you ask me. This means that for just £30 more than a PlayStation 4, you can get The Xbox One console + Kinect + TitanFall, which is easily one of the most anticipated games for the Xbox One.

Should Sony worry?

Some people say yes, some people say no. Firstly, Sony’s outselling the Xbox One 5-1 in Europe and 2-1 world wide. Although the Xbox One hasn’t launched in Japan yet, it will be hardpressed to compete against the PS4 there. Let’s forget for a moment about how powerful each console is, that’s been covered over a million sites…*cough* PS4 *cough cough*. Anyway, keeping that aside, it seems like there’s a terrible frenzy about what Sony should do, and how much trouble the Xbox One is in for throwing in the price drop. Sure, we’ve reported it ourselves that the Xbox One is in trouble. We talked about it when the PS4 launched in Japan, we covered the ESRAM issue with the Xbox One, the real question to be asked…

Is it a Big Deal?

Is it? Really? because let’s take a look back at both the consoles when they launched.

The Xbox 360 launched in Nov 2005 for $399. I’m not looking at the ‘core bundle’, which was priced at $299. While the PS3 launched in Nov 2006 for $599 for the 60GB model and $499 for the 20GB model. Let’s look at what happened roughly a year post launch for both consoles.

In April 2007, the Xbox 360 introduced a 120GB Elite model for $479, and by the mid of the year had shaved off $20 to $50 on it’s consoles. A year from here on, i.e. in 2008 October, their top model, the Xbox 360 Elite, was available for $399. That’s over $100 in one year. Now, let’s look at Sony…they made their first price drop in their 8th month. The Xbox 360 had no price drop for nearly 18 months. But you also need to keep in mind that while the price drops from Sony happened, it also added more value to it’s consoles by bumping up the storage space.

I’ve also shared in my previous post on what parameters are the consoles wars going to be fought, and I’ve clearly listed price as one of them within the first 12 months.

So again, is it a big deal? Should Microsoft worry? Should Sony rest on their laurels? 

No, No and No.

It’s not a big deal, because I don’t believe for a second that Microsoft has not thought this through. Being beaten hollow with a 5-1 sales figure in a particular region, you’ve almost got NO choice but to start playing the price card. So, smart move by Microsoft. Will it help sales? Time will tell. Although we feel that bundling TitanFall with the game was a sheer desperation move by Microsoft. Microsoft will not have to worry for now. I do believe they’re doing what needs to be done to sustain sales in a particular region. However, it’s common knowledge by now that they’ve somewhat missed the boat in the US, where Sony has already pulled ahead.

I sincerely believe where Microsoft went wrong was in their positioning. It’s the same mistake Sony did with the PS3, but quickly recovered from it by making some smart price cuts and storage space increments. It is highly possible that Microsoft will need to go that same route.

Having said all that, I don’t believe Sony will need to worry, but at the same time not rest on their quick success of the PS4. Knowing Sony, they’re already 2 steps ahead in their thinking, but rabbits have lost races. The consoles are both brilliant machines, and they’re here for the long haul. Microsoft needs to seriously rethink it’s positioning strategy. Certain things they can’t take back at this point, like the hardware..well that’s pretty much the only thing, but they can certainly change and take charge of the updates and bundles. Either they need to really start making significant changes to their offerings or it’s only going to get worse.

This is only the beginning of the console’s life cycle, we’re not even into the 12th month, so it’s a bit premature to over react to the price changes, as it’s pretty much expected within the first year. Having said that, I think they’ve made a great start with this. This is probably the opening that Microsoft needs to get back in the game.

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