Though Microsoft has been routinely battered since unveiling the Xbox One, it has managed to hold its own and make a comeback. However, the price of the console is still a bit of a stickler, especially compared to the PS4 which retails for a $100 less. At the Citi Global Technology Conference, Xbox chief marketing and strategy officer Yusuf Mehdi defended the console’s price point and explained the company’s stance.
“Competitively speaking, I feel like we have a much better and more complete value proposition. We do things that aren’t found on other platforms. The Kinect is a huge piece of differentiation, and the fact that we do entertainment and gaming.
“We wanted something to really differentiate that lets you play games as if you’re playing movies and we wanted to break the barrier of being able to voice control your television. So to do that, we added a lot of capability. For $499, we think the value we provide for that is a very good deal. We feel that we’ve done the right balance.
“We’re trying to provide a central device in the living room that for the first time can unify all forms of entertainment in one simple effort. We don’t just want to unify it, but then allow literally with your voice to control your television. We think TV’s will truly become smart TV’s where you can browse and do Skype communication and interactive television. Xbox One is key to opening up that world of next-generation entertainment.”
Mehdi also talked about seeing “low margins” of returns rather than losses when the Xbox One launches. “The strategy will continue which is that we’re looking to be break even or low margin at worst on [Xbox One], and then we make money selling additional games, the Xbox LIVE service and other capabilities on top. And as we can cost reduce our box as we’ve done with 360, we’ll do that to continue to price reduce and get even more competitive with our offering.”
The Xbox One will retail for £429/$499 and launch in November.