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Xbox One Is Pricey Because Microsoft Doesn't Put Consumers First Like Sony Does

Posted on Sunday, June 23 @ 11:39:17 PST by Jonathan_Leack


Sony and Microsoft might compete in the same space, but they're nothing alike.


Sony's mantra since the PS4 was revealed has been to appeal to gamers, and more specifically any consumer who enjoys video games. That means not prohibiting used game sales, letting people play when a connection isn't available, and pricing the console so it's affordable. Up to this point its strategy has worked. It sold out of launch day bundles within 48 hours and has continued to show dominance in polls. Although the PS4 will be the first Sony console to require a subscription fee to access many online features, consumers have been willing to push that aside. Sony has convinced the masses that it's looking out for their best interest.

Microsoft's corporate greed has finally caught up with it. Although many of its Xbox One policies have been reversed, the fact that it wanted to have complete control of game libraries and disallow traditional game trading said it all. Consumers were so outraged that Microsoft did a 180 on mechanics that its engineers had worked tirelessly on. But the damage was irreversibly done.

Then there's the price point. Many have wondered why a machine that offers less performance than the PS4 costs $100 more. Many point to the bundled Kinect 2.0, which certainly has had an impact, but there's more to it than that.

While speaking to News 10, Wedbush Securities analyst Michael Pachter stated the following:
I thought [Microsoft] were going to price at cost at $399 and put Sony in a pickle. They didn't. They priced at a profit, and as Microsoft said to me, "If we sell 10 million consoles at $100 more that's a billion dollars".

A billion dollars. To Microsoft that's like a bull seeing red. It can't take its eyes off the number no matter the consequences. Meanwhile, Sony is expected to cut even at its $399 price point despite being in serious financial trouble and considered "junk status" by credit rating agencies. It could have easily priced its impressive hardware at $499, but that would have gone against its principles.

When it comes down to it all this is all about making profit and both companies have wildly different philosophies. Microsoft has always been about business first, consumers second. Its Xbox One price point is an underlined example of its tendencies. Sony would never follow such a business model and has always been about luring consumers in with value and fighting to keep them under the Sony umbrella. Although its PS3 has remained the most expensive console in history with a $599 SKU, it was sold at a hefty loss during its first year. It learned its lesson, though. The announcement of a $399 MSRP PS4 was like seeing an ICBM fired at Microsoft.

As lop-sided as this all sounds it's extremely unlikely that the Xbox One and PS4 won't fight a bloody battle next-generation. This is only the beginning of a long war.
More Reading on the Xbox One:

Tags:   microsoft, Xbox One
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