Microsoft made the biggest about face in gaming history yesterday when it announced that it would be removing its controversial DRM system from the Xbox One only two weeks after announcing it. The move puts Microsoft’s console on par with the PS4 in terms of game ownership and DRM policies, but there’s still that $100 difference that may work in Sony’s favor going into the holiday season.
Everybody’s favorite gaming analyst Michael Pachter is saying that the $100 price difference between the Xbox One and the PS4 may go away in 2014 if Sony starts to steal the show. He feels, however, that Microsoft’s asking price of $499 is fair in light of it offering “a more robust hardware bundle than Sony.”
So, what does Microsoft need to do to convince people that $499 is a fair asking price? Pachter says it’s all about the messaging:
“Microsoft has not done a particularly good job of communicating the value proposition to consumers, but today’s announcement will remove an impediment to the company’s ability to get its message across. We are confident that with six months of focused messaging, Microsoft can fully level the playing field with Sony, and we expect the Xbox One to sell as many units as the PS4. If we are wrong, we think that Microsoft is prepared to lower price next year.”
During E3 last week, Xbox head Don Mattrick tried to explain that value proposition by saying that the Xbox One is “over-delivering value against other choices.” He went on to say that “we’re delivering thousands of dollars of value to people, so I think that they’re going to lov it when they use it.”
Microsoft is betting that value will come in the form of its entertainment options. The company is putting a lot of money into the Xbox One’s ability to reroute your cable connection through it to provide a unique Xbox One-ified cable experience. Not to mention all the other content coming to Xbox One in the form of an exclusive NFL agreement, various streaming services and a Halo TV series executive produced by Steven Spielberg.
At the end of the day, however, it all comes down to the games. Microsoft had a particularly strong showing on this point at E3 with a number of exclusive titles and timed exclusive DLC for games like Battlefield 4 and Call of Duty: Ghosts. Will it be enough to convince gamers to drop $500 on the Xbox One versus the $399 PS4? Well, its reversal on the DRM issue has certainly helped it reclaim the top spot on the Amazon best sellers list, but that’s partially due to Amazon being give a larger allotment of units.
In short, the point is that the high price of the Xbox One doesn’t seem to hurting it so far. We’ll have to see how things look in 2014 when the early adopter rush is over and regular consumers start to buy up consoles though.