Here’s why an Xbox One price cut would be a huge mistake

Xbox One Price Cut

Now that the Xbox One has fallen firmly into second place as the PlayStation 4 continues on its tour of world domination, fans of the Microsoft console are looking for answers. The $100 price difference between the consoles has clearly been a factor, but the wave of negative PR that surrounded the announcement of the Xbox One hasn’t helped either. How can Microsoft turn this console generation around before it completely loses momentum? Is it already time for price drop?

Not according to Forbes contributor Erik Kain:

“Cutting the price of the Xbox One this early into the console’s life-cycle would be a mistake,” says Kain. “If Microsoft slashes the price of its system from $499 to match Sony’s $399 PS4, the tech giant would lose money—quite a bit of money—on each unit sold.”

Kain goes on to discuss how the market would perceive a price cut this early in the console’s lifespan. There have already been discussions to the effect of Microsoft dumping the Xbox brand entirely, and taking such a huge loss on the Xbox One right out of the gate would only push investors further down that path.

There is also the possibility of alienating the early adopters with a price cut just four months after launch, but Microsoft already has their money. Nintendo pulled the same stunt with the 3DS not long ago and managed to skate by without any enduring backlash. That said, Nintendo fans have proven themselves to be gluttons for punishment (and I’m including myself in that group).

By releasing attractive bundles, Microsoft might be able to make up for lost time without resorting to drastic measures. It’s a long road, but one that the company will have to travel down to reassert itself in the field. Check out Kain’s article for more on the subject.

Source:
Forbes
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