When two games consoles launch at roughly the same time, price can play a major role in which one consumers decide to buy. For the Xbox Series X, Microsoft is thought to be waiting for Sony to reveal the PS5 price before undercutting it, even if that means selling the Series X at a big loss.
As VG24/7 reports, news of the plan to undercut the PS5 on price comes via well-known Wedbush Securities analyst Michael Pachter, and Peter Moore, former EA and Microsoft executive. Both men believe Microsoft is determined to be cheaper than Sony this generation, and that it could be as big as a $100 price difference.
The comments by Pachter and Moore were made during a short podcast hosted by Geoff Keighley last week. Pachter said, "From what I’ve seen, Sony’s gonna have to charge $500 for the PS5 and Microsoft has a big balance sheet ... If they wanna cut the price by $100 – just price below [PS5] and subsidise the first 10 million [units] – they will. So, I think that they’re waiting to have Sony blink first and then they’ll reveal the price." As to what that price will be, he thinks Xbox Series X will be $400.
Moore agrees, and believes both Sony and Microsoft are figuring out how much they can subsidise the hardware cost based on predicted games sales over the first couple of years. Both consoles are embracing SSD storage this generation, with Sony thought to have the more advanced solution. SSD isn't cheap, and add to that the pandemic interfering with production and supply chains, and you have high manufacturing costs.
A PS5 priced at $500 next to a $400 Xbox Series X would certainly offer Microsoft a big advantage initially, but then the launch titles have to be factored in, as well as the exclusives each platform offers over the first couple of years. We also don't yet know if one console has a performance advantage over the other, which could make many gamers look past a higher price.
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