An important question that could make or break Microsoft’s next-gen console.
Lots of decisions go into which console somebody might buy, especially at the beginning of a generation when the consoles are at the highest prices they ever will be. Sure, some people do end up getting multiple consoles, but by in large this is a statistically irrelevant number of gamers at launch. At first, the vast majority of gamers land on one expensive machine that plays games first before they decide to expand into other ecosystems.
The launch line up games, various features, and of course the price are all important considerations to make. The latter, perhaps even more than anything else, can make or break a console launch. Taking even a casual look back at not-so-distant gaming history will tell you that, generally speaking, the more competitive the price, the more competitive the console. There is of course the occasional exception to that rule as the Ouya was more or less dead on arrival despite being extremely affordable, but as far as the big three gaming behemoths are concerned, keeping things as cheap as possible is generally something to prioritize and strive for.
Nobody out of the big three should understand this concept more than Microsoft. Out of the several self-inflicted wounds Microsoft had to deal with at the beginning of the eighth generation of gaming consoles, the price point was easily one of the most egregious. 499 dollars certainly isn’t the most expensive console of all time, but when compared to the much more consumer-friendly prices of Nintendo’s Wii-U and the PlayStation 4, gamers’ holiday purchases would be greatly affected by the Xbox One’s 100 dollar difference from Sony’s console and even more than that from Nintendo’s offering at the time.
It’s a lesson that has been learned the hard way multiple times by other consoles. Panasonic’s 3DO and even the PlayStation 3 for a time were both ways outside of an acceptable range for mainstream gaming audiences, and both suffered greatly for it. Thankfully for the Xbox One, having the backing and extremely deep pockets of Microsoft, was able to correct course and pick itself back up, even though it would never catch back up to the PS4 the way the PS3 did to the 360. Even though Microsoft made other mistakes aside from their initial price, that was arguably one of the biggest drawbacks to their console at launch, if not the biggest, and set the tone for the rest of the generation for them.
Even though the Xbox One didn’t overtake the PlayStation 4 at any point, or even come very close, it did ultimately turn things around and started selling at acceptable levels. Removing the camera as a mandatory accessory and backtracking on several other things certainly played a role, but one of the if not the biggest factor for the turnaround was the price officially being dropped to $399 where its competition was and had been for a while. So, with that said, it would follow that having a competitive price this time around would be extremely important for Microsoft’s console. Seeing as how $499 didn’t work last time around, logically the assumption could be that $399 would be a better target this time. But the decision of officially making it that price does depend on a few things.
A huge factor in deciding a price point is the price of the competition. Odds are, Microsoft has an idea of what Sony is probably going to end up with and is trying to match it, but there’s no way to know for sure. Even if Microsoft has some extremely good intel on Sony, these companies can be very nimble and change direction quickly if need be, so Microsoft is likely treading very lighting on this topic. With all of the tech that both the Xbox Series X and PlayStation 5 are likely to have crammed into them, a $499 price certainly isn’t out of the question. Surely the consoles would justify that on paper at least.
If these consoles are going to have what we think they will, they could theoretically be worth even more than that. With the lessons of the previous generation and even the lessons of PlayStation 3’s outrageous $599 price for their top-tier system fresh on the mind, it’s unthinkable that we would have to revisit that particular error for either company in 2020. So, it probably is going to come down to $399 or $499 US dollars. This will likely mean that both Sony and Microsoft will be taking a loss on their systems for the first year or two while making up for it with software sales, but the upside is they stay competitive with each other and get their boxes into as many living rooms as possible.
Microsoft has generally been pretty smart with its console’s prices though. Looking back on the original Xbox, competing with the PlayStation 2 and GameCube lead Microsoft to slap a fairly competitive price point on their first gaming box of $299 dollars. This helped the console sell well, despite causing problems in other areas for Microsoft as their manufacturing costs were quite high at the time, nevertheless, The Xbox brand was propelled into the mainstream and that helped with their next console, the also very fairly-priced Xbox 360 which stuck with $299 for a base model, $399 for an optional 20gb model, which might have ruffled more feathers if it weren’t for Sony’s console launching at several hundred dollars more and sucking all of the available scorn out of the air for themselves.
Microsoft’s only real major error in price ever occurred with the Xbox One, at $499. Once they were able to remove the Kinect, this was corrected, but the damage had been done and the lesson had been learned. Now, Microsoft has more than enough knowledge to know that $399 or $499 are likely the only acceptable prices for 2020.
So, where should Microsoft fall between those two prices? Obviously, there are a litany of things to consider to reach a conclusion on that, but for the purposes of this conversation we’ll largely focus on features and competition. Firstly, the biggest thing that goes into what a console is worth to potential customers is what the thing does. Does it play older games? Does it run other forms of media like 4k blu-rays? Does it have any other interesting bells and whistles that might make it more than just the device I use to play Halo?
Well, Microsoft has made it pretty clear that they intend to answer all of those questions with a resounding yes. To some, this might make the box worth a little bit more than the expected standard of $399, but that brings us back to the other hemisphere of decision-making; the competition. Sony is likely to try to nail down that $399 again, and obviously Microsoft can’t afford to have a repeat of 2013, so $399 is likely the price they will land on here as far as I can tell. The only way it could go higher than that is if both consoles go higher or if Xbox feels they really can make an argument that their box is 100 dollars better than Sony’s and both, ultimately, are unlikely outcomes. If I were a betting man I’d say that Microsoft’s next console, as well as Sony’s will land on $399, but we’ll have to wait for more factors to be revealed to know this for sure.
Note: The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, GamingBolt as an organization.